Despite rising 8.1 percent over the course of 2021, the Chinese Government is “under the triple pressure of demand contractions, supply shock and weakening expectations” according to the head of the National Bank for China. According to data from the National Bureau of Statistics, GDP expanded four percent year on year – 2.5 percent short over the same period of 2020.
Quarter-on-quarter growth, however, improved to 1.6 percent, compared with a revised 0.7 percent in the July to September period.
The People’s Bank of China cut an important lending rate for the first time since April 2020, to ease a property slowdown and the effect of recurrent restrictions as coronavirus cases break through the country’s zero Covid policy.
The country’s strict measures to eliminate all coronavirus cases, with big cities implementing lockdowns in recent weeks, have highlighted lingering weaknesses in consumption.
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The ongoing decline has quickened a looming demographic crisis that economists warn could reshape the country’s economic vitality.
For years China held its notorious ‘one child’ policy for families, but this was scrapped in 2016 and replaced with a maximum of two children per parents.
In 2021, the country’s birth rate was 10.6 million – down from 12 million in 2020 – and is the lowest number since the People’s Republic of China was founded in 1949.
The number of people aged 60 or below also declined for the first time, while overall population growth was just 480,000.
The declining and the increased life expectancy that has accompanied China’s economic transformation over the last four decades means there will soon be a decline in the number of people of working age relative to the growing number of people too old to work.
According to the data released on Monday, China’s population still grew last year – but not by much – climbing to 1.412 billion.
However, for the first time since the Great Leap Forward era 60 years ago, the number of those who died was remarkably close to the number born, at 10.1 million.
The result could be labour shortages, which could severely dampen one of China’s biggest aims – economic growth.