According to a report by the Rhodium Group featured in the South China Morning Post, China’s demographic downturn is expected to accelerate, with the population projected to decrease by nearly 60 million over the next ten years. This decline is equivalent to the entire population of France, highlighting a significant shift that could reshape the global economic landscape and internal social structures of the People's Republic.

The primary driver behind this trend is a consistent and sharp drop in birth rates. In 2025, the number of newborns fell to 7.92 million, marking a 17% decrease from the previous year. This ongoing decline, now in its fourth consecutive year, is attributed to the high cost of living, evolving social norms, and the financial challenges associated with raising children in urban environments.

The demographic shift is already manifesting as a substantial burden on the national economy. In 2025, budget subsidies for social security funds reached a record 2.5 trillion yuan (approximately $425 billion), accounting for 10.1% of China’s total budget. As the workforce shrinks and the elderly population grows, the government faces increasing pressure to fund pension systems and healthcare services.

Beyond fiscal challenges, the Rhodium Group predicts that a shrinking population will inevitably lead to a contraction in credit demand and a downward trend in interest rates. The reduction in the number of consumers and workers is expected to dampen domestic demand, forcing financial institutions to adjust their long-term strategies. This demographic transition represents one of the most critical challenges for China’s sustained economic growth in the 21st century.