On Monday, the national bureau of statistics announced that China’s population growth rate has fallen to its lowest level in six decades, with births barely outnumbering deaths in 2021. Over the past year, there have been major government efforts to increase population growth and mitigate a demographic crisis, however, they have been largely unsuccessful. In China, 10.62 million babies were born in 2021, a rate of 7.52 per thousand people. In the same period, China recorded 10.14 million deaths, producing a population growth rate of just .34 per thousand head of the population.

The recent findings add to last May’s census, which occurs once every decade. The census found an average annual rise of 0.53%, down from 0.57% reported in the years from 2000 to 2010. China is facing a population crisis, with predictions of imminent negative population growth. Monday’s figures showed that the proportion of those aged over 60 in China rose from 18.7% in 2020 to 18.9%. Beijing has already announced major reforms that aim to address the decline, including replacing the two-child policy introduced in 2016 and raising the retirement age. China’s high cost of living, delayed marriages, and social immobility are frequently cited as contributing factors to young adults’ reluctance to have children. To address these factors, Beijing has banned expensive private tutoring and pledged better access to childcare and maternity leave. However, the root cause might be much deeper than expected.

So What: In terms of geopolitical risks, this one is one of the greatest Gray Rhinos out there. It has been reported on and analyzed for years, but does not seem to be part of the main stream consciousness or understood by policy makers. Do not let its significance pass you buy.

What’s Next: This may be the PRC’s greatest strategic fear and is already reflected in their agenda and action plans. We do not see any indication that they are addressing this in a strategic way so believe PRC leadership will be surprised at the impact of this trend and it may even threaten CCP leadership of the nation. This increases the risk of massive disruption to supply chain and transformation of commodity markets as well as potential for military action.

Your Action: Be sure demographic shifts like this are part of your scenario planning. Become an OODA Network member to discuss this topic with peers. Read the latest on issues and actions around China here at OODAloop, sign up for the OODA daily pulse to ensure you are alerted of every development. Track issues around geopolitical risk at the OODA Geopolitical Sensemaking Page.

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