Does a falling population mean a worsening economy?

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China recorded 7.92 million newborns in 2025, down from 9.54 million the previous year, according to China's State Council Information Office (SCIO)'s press conference on Monday.

True, China's birthrate is declining – the lowest level in modern history. But equating this demographic shift with an inevitable economic downturn, as some Western media outlets have done with alarming headlines about aging, a shrinking workforce, and rising pension burden, oversimplifies a far more complex reality.

To begin with, China's population of 1.4 billion exceeds the combined total of all existing developed nations. The United States has just 330 million people, Japan 120 million, and Europe's developed countries each have under 100 million: Germany around 80 million, while the UK and France each have just over 60 million. This alone provides an enormous market foundation for high-quality development, with vast production and consumption potential.

According to the SCIO, China's population aged 16–59 stood at 851.36 million at the end of 2025, reflecting still-abundant labor resources. Meanwhile, the population aged 60 and above reached 323.38 million, including 223.65 million aged 65 and over – an increase of 13.07 million and 3.42 million, respectively, from the previous year. Importantly, a large share of seniors falls within the 60-64 group, many of whom remain healthy, socially active, and economically engaged, continuing to contribute to both growth and social development.

Using the international definition of working-age population (15-64), China still counts 968.48 million people, or 68.9 percent of the national total. This places China among the countries with the largest labor pools in the world, providing strong support for sustained economic growth.

More fundamentally, the assumption that population decline signals the end of growth reflects a misunderstanding of how modern economies actually generate prosperity. In this sense, China's demographic transition is accelerating its shift toward a more qualitative, innovation-driven, and service-oriented economy.

Japan, South Korea, and much of Europe show that economies under demographic pressure can remain manufacturing powerhouses by leveraging automation and innovation to offset smaller workforces. China's own demographic changes are encouraging firms to invest more aggressively in automation and advanced management practices.

And don't forget, China's population continues to make steady gains in education, skills, innovation capacity, and health.

In 2025, average years of schooling among those aged 16–59 reached 11.3 years, up 0.1 year from the previous year, according to the SCIO. National life expectancy stood at 79 years nationwide in 2024 and continues to rise gradually. Meanwhile, the total number of R&D personnel hit 10.797 million. This transition from a quantity-driven demographic dividend to a quality-driven talent dividend will help propel high-quality socioeconomic development.

In addition, aging itself creates new growth opportunities, as seen across many economies. Demand is rising for healthcare services, pharmaceuticals, medical devices, rehabilitation, senior housing, and AI-enabled homecare. In China, the so-called “silver economy” is rapidly emerging as a frontier for business and technological innovation. That is not spin, but a recognition that demographic change reshapes the composition of growth rather than eliminating it.

According to a report from the China Center for Information Industry Development, China's silver economy reached 8.3 trillion yuan (roughly $1.16 trillion US dollars) in 2024 and is expected to expand to 25 trillion yuan by 2030.

Official data also show that seniors now account for more than 20 percent of China's total domestic tourists. In the first half of 2025, revenues from elderly-oriented tourism, sports and wellness services, and cultural-recreational activities rose by about 26 percent, 24 percent, and 21 percent year on year, respectively.

Critics often argue that China is "aging before it gets rich," but this framing ignores the policy tools still available, which are designed to alleviate the burden of falling population.

Governments at all levels in China have been refining fertility support measures, establishing childcare subsidy systems, expanding affordable early childhood services, improving access to high-quality education, and building a comprehensive population services framework spanning all age groups and life stages.

The drop to 7.92 million births may pose some challenges to the Chinese economy in the long run, but by fully embracing innovation, nurturing human capital, and seizing the opportunities within an aging society, China's economy is gradually shifting to a more qualitative and innovation-driven model – without faltering as some Westerners hype.

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