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China’s Shrinking Youth Population Is Reshaping the Economy

China's Shrinking Youth Population & Economic Impacts

China’s kindergartens are closing at a pace that has startled even demographers who expected this decline. The country lost 21,100 kindergartens in 2024 compared with 2023, the sharpest single-year drop on record, following a loss of 14,808 kindergartens in 2023 and a first-ever enrollment decline in 2022. Kindergarten enrollment, which peaked at 48 million children in 2020, has fallen for four consecutive years and is projected by the Yiyang Education Research Institute to reach roughly half that peak level by 2030.

This is what China’s fertility collapse looks like once it moves from national statistics into physical infrastructure. China’s school-age population, according to the 2020 Seventh National Census, is projected to plunge from 328 million to approximately 250 million between 2021 and 2035, a decline of roughly 24 percent in just 14 years. The consequences extend well beyond education: a shrinking generation of children today becomes a shrinking working-age population within two decades, with direct implications for economic growth, consumer markets, and the sustainability of China’s pension system.

China’s Youth Population Has Changed Dramatically

Population at a Glance

  • Working-age population (15-64), 2025: approximately 968.5 million, or 68.9% of the total population, according to Statista compilation of NBS data
  • Working-age population trajectory: peaked and began declining in 2014, according to China’s National Bureau of Statistics, marking the first sustained downward trajectory in the country’s modern working-age population
  • Population under 15: approximately 15.4% of the total, according to 2025 estimates
  • Population aged 60 and older: 16.1%, projected to reach 25.2% by 2030, according to demographic research cited by the Cornell Wharton China Center
  • School-age population (2021 baseline): 328 million, projected to fall to approximately 250 million by 2035, a 24% decline
  • Kindergarten enrollment: fell from a peak of 48 million in 2020 to 40.9 million by 2023, projected to reach roughly half the 2020 peak by 2030
  • Total fertility rate: approximately 1.0 births per woman, among the lowest in the world

Sources: China National Bureau of Statistics; 2020 Seventh National Census; China Policy demographic analysis, October 2025; Statista compilation of NBS age structure data.

Low Fertility Is Creating Smaller Generations

China’s fertility decline traces back further than the widely discussed 2022-2025 population contraction. The working-age population itself first began declining in 2014, according to National Bureau of Statistics data, a full eight years before the total population followed the same trajectory in 2022. This gap reflects basic demographic mechanics: a shrinking number of births takes roughly 15 to 20 years to show up as a shrinking working-age population, and several more years beyond that before deaths begin exceeding total births at the national level.

China’s one-child policy, in effect from 1979 to 2015, is frequently cited as a root cause of the current demographic contraction, though demographers, including those cited in RAND Corporation research on China’s fertility decline, note that fertility had already been falling substantially before the policy’s strictest implementation, and that China’s post-2015 shift to a two-child and, from 2021, a three-child policy has not meaningfully reversed the underlying downward trend.

As documented in this series’ companion article on China’s population decline and its cities, China’s current fertility rate of approximately 1.0 births per woman reflects structural factors, including exceptionally high housing, education, and childcare costs in major cities, that have proven resistant to policy liberalization alone.

Schools and Universities Are Already Feeling Demographic Change

China’s Ministry of Education data provides some of the clearest real-time evidence of the youth population contraction. Primary schools fell by 5,645 in 2023 alone, according to Ministry of Education figures reported by the South China Morning Post, reflecting both the shrinking school-age population and continued consolidation of smaller rural schools into larger urban and township facilities.

This consolidation has produced a striking geographic mismatch documented by Chinese education researchers: urban schools in China’s 46,500 city-based institutions average 45 students per class, with some classes reaching 50 to 60 students, well over capacity, while rural schools, numbering approximately 83,000, average fewer than 29 students per class, reflecting the “empty villages, crowded cities” pattern that has accompanied China’s continued urbanization even as the underlying national school-age population shrinks.

China’s 21st Century Education Research Institute projects that school-age populations will peak at different times across educational stages as the demographic wave moves through the system: primary school enrollment was projected to peak in 2023, middle school enrollment in 2026, and high school enrollment in 2029, each followed by sharp and sustained decline as progressively smaller birth cohorts age into each stage.

The Future Workforce Will Be Smaller

China’s working-age population, defined by Chinese statistical convention as ages 16 to 59, is projected to fall by nearly 10 percent between the early 2020s and 2030, according to demographic research cited by Cornell University’s Wharton China Center, even as the population aged 60 and older climbs from approximately 16.1 percent to 25.2 percent of the total over the same period.

China’s labor force has already shrunk by approximately 26 million people from its peak as of recent estimates, according to the same research, a contraction that has begun contributing to labor shortages in specific sectors even amid a slowing overall economy and periodic layoffs in others.

RAND Corporation research modeling total working-age population trends across China, India, and Japan through 2050 places China’s trajectory on a clear downward path over the coming decades, a divergence from India, whose working-age population continues growing over the same period, a shift that RAND researchers connect directly to broader questions of comparative economic and, in some framings, military-relevant demographic capacity between the two countries, a topic addressed with appropriate caution in this series’ introductory Iran article regarding the broader relationship between demography and geopolitical power.

Aging and Youth Decline Create a New Dependency Equation

China’s dependency ratio, the combined share of children and elderly relative to the working-age population, is shifting in a specific and consequential direction: unlike some countries where a shrinking youth population is offset by a still-growing working-age population, China is experiencing simultaneous youth contraction and rapid elderly growth, producing a dependency ratio that RAND researchers project will worsen substantially through 2050, a trajectory the same research describes as more severe than India’s, where the dependency ratio is expected to see only a slight rise after 2030, reaching around 0.5 by 2050, indicating a considerably better-balanced ratio of workers to dependents than China’s projected path.

Consumer Markets Will Change as Generations Shrink

A shrinking youth population carries direct commercial consequences that Chinese businesses and policymakers are already navigating. Industries built around children’s goods and services, from toys and educational products to children’s healthcare and after-school tutoring, face a structurally shrinking customer base independent of any short-term economic cycle, a dynamic already visible in the kindergarten sector’s enrollment collapse.

Simultaneously, demand for elderly-focused goods and services, including healthcare, assisted living, and pension-related financial products, is expanding rapidly as China’s over-60 population climbs toward a projected 25.2 percent of the total by 2030, creating a structural reallocation of consumer demand across the Chinese economy that mirrors, at a larger scale, the education-to-eldercare infrastructure shift discussed in this series’ companion China cities article.

Can Productivity Offset a Smaller Workforce?

Economic research on China’s demographic trajectory has examined whether productivity gains can offset the shrinking working-age population’s drag on overall economic growth.

A widely cited pre-pandemic analysis from the Harvard Kennedy School’s Growth Policy Program modeled three specific mechanisms, further improvement in educational attainment through cohort replacement and rising college enrollment, improved aggregate labor quality through continued urbanization, and higher labor force participation through later retirement, finding that these factors combined could lift projected effective labor input growth to approximately 0.40 percent annually for 2015-2030, compared to negative 0.60 percent for the raw working-age population alone, translating to a modeled GDP growth rate of approximately 5.80 percent versus 5.23 percent if these offsetting factors were ignored.

This research illustrates that while productivity and human capital improvements can meaningfully soften the economic impact of a shrinking workforce, they represent a partial offset rather than a full solution to the underlying demographic contraction.

Can China Reverse the Youth Decline?

China’s government has progressively relaxed its family planning restrictions, moving from the one-child policy to a two-child policy in 2015 and a three-child policy in 2021, alongside various financial incentives at the local and national level intended to encourage larger families.

These policy shifts have not, to date, produced a sustained reversal in China’s birth trend: births continued falling to a record low of 7.92 million in 2025, as documented in this series’ companion article on China’s population decline, suggesting that, consistent with international experience in South Korea, Japan, and other low-fertility societies covered elsewhere in this series, policy liberalization alone has proven insufficient to reverse fertility decline once it becomes deeply embedded in social and economic behavior around housing costs, education competition, and career prioritization, particularly among women.

China’s Demographic Outlook

China’s shrinking youth population points toward a working-age population that will continue contracting through at least 2050, according to RAND Corporation modeling, with the dependency ratio worsening substantially as the elderly share of the population climbs toward and likely beyond the 25.2 percent threshold projected for 2030.

The compounding effect of a shrinking youth cohort today translating into a shrinking working-age population within 15 to 20 years, combined with a rapidly growing elderly population that already exceeds the youth population’s growth trajectory in the opposite direction, positions China’s demographic transition as one of the most consequential and, given the country’s economic scale, globally significant trends covered in this entire series.

Frequently Asked Questions

1. Why is China’s youth population shrinking?

China’s youth population is shrinking because of a fertility rate of approximately 1.0 births per woman, far below the 2.1 replacement level, driven by high housing, education, and childcare costs in major cities, delayed marriage, and social and economic pressures that have persisted despite the government’s progressive relaxation of family planning restrictions since 2015.

2. How many children live in China?

China’s population under age 15 made up approximately 15.4 percent of the total population as of 2025 estimates, while the school-age population specifically is projected to fall from 328 million in 2021 to approximately 250 million by 2035.

3. Why has China’s fertility rate fallen?

China’s fertility decline reflects decades of the one-child policy in effect from 1979 to 2015, combined with rapid urbanization, rising education and housing costs, and changing social attitudes toward family size, factors that have proven resistant to reversal even after the government moved to a two-child policy in 2015 and a three-child policy in 2021.

4. How will youth decline affect jobs?

China’s working-age population, which first began declining in 2014, is projected to fall by nearly 10 percent between the early 2020s and 2030, a contraction that has already shrunk the labor force by approximately 26 million people from its peak, according to demographic research, contributing to labor shortages in specific sectors.

5. Will China face labor shortages?

China is already experiencing labor shortages in specific sectors even amid a slowing overall economy, as its working-age population continues contracting from its 2014 peak, though productivity and human capital improvements, including higher educational attainment and later retirement, are projected to partially offset the economic impact.

6. Can China increase births?

China’s family planning policy liberalization, moving from a one-child to a two-child policy in 2015 and a three-child policy in 2021, has not produced a sustained reversal in the country’s birth trend, with births falling to a record low of 7.92 million in 2025, suggesting that policy changes alone have been insufficient to reverse deeply embedded fertility decline.

7. How will consumer markets change?

Industries built around children’s goods and services, including education, toys, and childcare, face a structurally shrinking customer base, illustrated by kindergarten enrollment falling from 48 million in 2020 toward a projected roughly 24 million by 2030, while demand for elderly-focused healthcare, assisted living, and pension products is expanding rapidly.

8. What will China’s workforce look like in 2050?

RAND Corporation demographic modeling projects China’s working-age population will continue contracting through 2050, with the dependency ratio worsening substantially as the elderly population share climbs well beyond the 25.2 percent projected for 2030, a trajectory notably more severe than comparable projections for India over the same period.

Sources

  • China National Bureau of Statistics (NBS), age structure and working-age population data, 2014-2025.
  • 2020 Seventh National Population Census of China, school-age population projections, 2021-2035.
  • China Policy, “Demographic Shift Hits Education,” Substack analysis of Ministry of Education data, October 2025.
  • Statista, “China: population by age group 2025,” compilation of NBS data.
  • RAND Corporation, “Fertility Decline in China and Its National, Military, and Economic Implications,” research report, 2025.
  • South China Morning Post / Malay Mail, China Ministry of Education kindergarten and primary school data, October 2024.
  • Cornell University ILR School, Catherwood Library, “China’s Working Age Population to ‘Fall Sharply’ by 2030,” demographic research compilation.
  • Harvard Kennedy School Growth Policy Program, “Effective Labor Supply and Growth Outlook China,” research paper.

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