China's Growth Engine Fading... Global GDP Share Declining and Birth Rate at Record Low

Global GDP Share Expected at 17%
1.4%P Decrease Compared to COVID Period
China's National Competitiveness Weakens
Births Expected to Decline by 10%
Chronic Labor Shortage Becomes a Reality

China's economy has entered a recession phase even after reopening, leading to a decrease in its share of the global gross domestic product (GDP). Concerns are rising that China's growth engine is fading as the birth rate falls to the lowest level since the founding of the country.

On the 19th (local time), major foreign media reported that China's share of the global GDP this year is expected to drop to 17%. This represents a 1.4 percentage point decrease compared to 18.4% in 2021, when the economy was hit by COVID-19, marking the largest decline since 1960.

China's GDP share, which was less than 2% in 1990, increased more than tenfold to 18.4% in 2021. However, growth momentum has stalled since the post-COVID-19 period. Since the global GDP share is a measure comparing relative economic power among countries, this trend is analyzed as a weakening of China's national competitiveness.

China's contribution to this year's global GDP growth is also expected to be minimal. According to major foreign media, the global GDP is projected to grow by $8 trillion (?1,391 trillion) this year, reaching $105 trillion. Of this $8 trillion increase, the United States accounts for 45%, while the remaining 50% is estimated to be shared by emerging countries including Indonesia, Mexico, and India. These statistics indicate a potential shift in the world economic order, which has been divided between the U.S. and China, according to major foreign media.

The long-term economic outlook is also clouded. With the birth rate, directly linked to national productivity, hitting an all-time low, China is expected to face a chronic labor shortage in the future.

Nihon Keizai forecasts that the number of births in China this year will be 9 million, a decrease of more than 10% from 9.56 million last year. Professor Chao Jie of Peking University Medical School predicted, based on statistics showing a more than 40% drop in births over five years, that the number of births this year could fall below 9 million, possibly as low as 7 to 8 million. This would be the lowest number of births since the founding of the People's Republic of China in 1949. Last year, China's birth count fell below 10 million for the first time in history.

Since the working-age population is a key factor determining a country's potential growth rate, the decline in birth rate could lead to slower economic growth in China. Currently, Chinese people make up 19% of the global working-age population, but major foreign media predict this ratio will fall to 10% over the next 35 years.

In this situation, the government is intensifying regulations on companies, which is criticized for further fueling China's economic slowdown. According to analysis by financial information firm Refinitiv, the market capitalization of the five major big tech companies, including Alibaba and Tencent, has evaporated by ?1,400 trillion over two years due to the Chinese government's high-intensity regulations. The exodus of companies, fearing the impact of U.S.-China tensions and government regulations, is continuing. Previously, global companies such as Apple from the U.S. and Mango from Spain led the relocation of factories out of China, but recently, mainland Chinese companies with high export ratios have also joined the trend of leaving China.

Major foreign media stated, "No matter what measures Chinese President Xi Jinping takes, China's share in the global economy will decline," and diagnosed that "this is effectively the post-China era (where China's economic influence is diminishing)."

This content was produced with the assistance of AI translation services.