China's Demographic Dilemma: Implications For Xi Jinping's Vision

As China navigates an unfolding demographic crisis, the implications for President Xi Jinping's mid-century ambitions are becoming increasingly pronounced. According to University of Wisconsin-Madison researcher Fuxian Yi, "Beijing's political ambitions are based on exaggerated economic forecasts, which are based on exaggerated demographic figures. The dire demographic outlook makes both China's economic and military goals impossible to achieve," he shared with Newsweek.

At the start of his first term, Xi set forth the ambitious goal of achieving the "great rejuvenation of the Chinese nation" by 2049, marking the centennial of the People's Republic of China. In the following decade, the country made significant strides towards this goal, with millions escaping poverty and Beijing establishing its position as a key player in global finance and diplomacy.

However, the second-largest economy in the world has been facing challenges in its post-pandemic recovery. This is largely due to low domestic demand, a struggling real estate market, and high levels of public debt. Experts warn that China may be teetering on the edge of the middle-income trap, which could hinder its long-term economic prospects.

China's demographic landscape, similar to that of its East Asian neighbors like Japan, South Korea, and Taiwan, is under threat due to low birth rates and an aging workforce. Unlike in the United States, where the birth rate is also below the replacement level of 2.1 children per woman, East Asian countries are reluctant to fully embrace immigration as a solution to their future workforce shortages. Despite the government investing in policies and spending hundreds of billions on childcare and fertility treatments, the trend of declining birth rates has not yet reversed.

Last year marked a concerning milestone, as it was the seventh consecutive year of declining births and the second year where more people died than were born. The United Nations projects that China's population, currently the third largest in the world after India, will shrink from 1.4 billion to 1.31 billion by 2050. Yi believes this forecast is overly optimistic, suggesting that the population may already be at 1.3 billion and could drop to around 1 billion by mid-century if the fertility rate stabilizes at a mere 0.8 expected births per woman.

Furthermore, the proportion of Chinese citizens aged 65 and older is expected to rise from about 15% to 35% by 2050, exerting pressure on public resources and diminishing productivity. In light of these trends, China's Foreign Ministry has not yet responded to inquiries regarding these pressing issues.

Xi's aspirations for the mid-century include transforming the Chinese military, known as the People's Liberation Army, into a "world-class" force capable of dominating not just its immediate region but also countering the United States on a global scale. Currently, it is the largest military in numerical terms, boasting the most warships and a formidable rocket force equipped with nuclear capabilities. The Pentagon has already identified it as America's "pacing threat" in this century.

Integral to Xi's vision for rejuvenation is the unification of Taiwan, which may require the use of force. The Chinese Communist Party views the democratic island as an inseparable part of its territory, despite never having governed it. Speculation suggests that Xi has set 2027 as a target date for the military's capability to take Taiwan, a move that could have catastrophic consequences not only for Taiwan's people but also for those in the invading country.

Yi has made parallels between China's demographic decline and Russia's economic stagnation, which followed the imposition of Western sanctions after its annexation of Crimea in 2014. Births in Russia fell significantly, from over 1.9 million in 2015 to 1.4 million in 2021, and continued to decline by another 140,000 in 2023, following Russia's invasion of Ukraine.

If China were to engage in military action against Taiwan, Yi warns that the repercussions would likely lead to similar declines in birth rates as seen in Russia, affecting public perception and willingness to have children. Even in the event of a rapid military victory—which remains uncertain—China would almost certainly face severe sanctions from the West, resulting in reduced demand for exports and increased unemployment, further exacerbating its demographic and economic challenges.

In conclusion, Yi asserts that "China needs to face up to its real demographic crisis, conduct strategic contraction, improve relations with the United States, and work with the U.S. to maintain the existing international order, which is a win-win for China and the West." This call to action highlights the urgent need for China to address its demographic challenges to safeguard its future.