January 18, 2023

By German Lopez

Good morning. China's authoritarian government has gotten in the way of the country's growth.

Shanghai in September.Qilai Shen for The New York Times

A halting rise

For years, American politicians have warned that China could challenge the U.S. as the world's top superpower. As China's growth regularly outpaced Western rivals, it seemed on track to become the world's biggest economy.

But even the most bullish assessments of China's rise always anticipated its growth would eventually slow. That slowdown has arrived sooner than expected, as a result of poor decisions by Chinese leadership.

Two developments yesterday highlighted the risks for China. Chinese officials announced that the country's population declined last year for the first time in more than 60 years. They also released data showing that the country's economy grew only 3 percent last year, well below the government's target of 5.5 percent.

Both these outcomes are closely linked to Chinese policy. Decades-long government efforts to reduce birthrates nationwide, including the policy of allowing most families to have only one child, sped up the population decline. And the economic slowdown is in part tied to the zero-Covid policy that China backed away from only last month, which left the country unprepared to reopen.

This newsletter will explain what yesterday's developments mean for China's future.

Stifled growth

Experts have long anticipated China's population decline. Some analysts argue the decline actually started years ago. Regardless, the drop is coming more quickly than expected; previous projections from China and the U.N. suggested the decline would not begin until the next decade.

The population is aging rapidly. The median age in China has already surpassed that of the U.S. and could rise above 50 by 2050. Even Europe's fastest-aging countries are not expected to surpass a median age of 50 until around 2100.

To some degree, China is following a typical trajectory: Birthrates tend to drop and median ages tend to rise as countries develop. Birthrates have also dropped in general across East Asia. But China sped up its trajectory with its one-child policy, which began in the late 1970s and was in effect until 2016; its fertility rates are now lower than those in the U.S., Europe and Japan.

China "will no longer be the young, vibrant, growing population," Wang Feng, an expert on China's demographic trends at the University of California, Irvine, told my colleagues Alexandra Stevenson and Zixu Wang. "We will start to appreciate China, in terms of its population, as an old and shrinking population."

A Covid testing center in Shanghai in March.Qilai Shen for The New York Times

The population decline is bad for China's economic growth. An aging population makes for a weak labor force, and it tends to use more government resources through retirement and health care benefits, as Paul Krugman explained in Times Opinion.

The demographic news comes at a time when economic growth has already slowed in China. Even before yesterday's announcement, China's growth had mostly slowed for more than a decade.

The government's zero-Covid policy worsened the problem by forcing large parts of the country, including economic engines like Shanghai, to abruptly and repeatedly lock down. Now that the policy is lifted, the virus has been spreading rapidly — again hurting China's economy as sick workers stay home.

In both cases, decisions by Chinese leadership played a central role, stifling China's potential. This is obviously possible in any country, but it is an especially big risk for China because its authoritarian form of government concentrates power with less public accountability. In the era of Xi Jinping, power has become even more concentrated.

"Where China of the 1980s and 1990s saw real debates over many state policies, party leaders today find themselves compelled to simply parrot Xi Jinping's own policy line or fall quiet to save their own skins," said Carl Minzner, senior fellow for China studies at the Council on Foreign Relations.

Uncertain future

Neither of these developments means that China's rise is doomed to end. "Modern China, as a phenomenon, is unprecedented, which makes prediction very hard," said my colleague Max Fisher, who covers international issues. "Anyone who gives you a big, confident, splashy prediction is spinning you."

China is large enough that it will almost certainly continue to play a significant role on the world stage, and the size of its economy could still surpass that of the U.S. The question is whether China will become a true superpower, one as wealthy and influential as America.

Consider: China's G.D.P. per capita — measuring its economic worth per person — is less than a fifth of that of the U.S. Chinese individuals are still, on average, much poorer than Americans.

China would not be the first country to fall short of predictions that it would surpass the U.S. In the 1980s, American politicians and pundits feared that Japan would do the same. Japan, in part because of a demographic crisis, did not.

To demonstrate the challenges that China faces to vault past the U.S., Douglas Irwin, an economics professor at Dartmouth College, cited an analogy about learning organic chemistry, a notoriously complex subject. Students could study and master an 800-page textbook on the topic, bringing themselves "close to the frontier of knowledge." But it would be much more difficult to then write the next edition of that textbook.

"The former is hard enough," Irwin said. "The latter is impossibly hard."

For more

China's population has begun shrinking sooner and more sharply than many experts had forecast.
Many young couples in China stick to smaller families despite efforts to encourage them to have more children.
A senior government envoy to the World Economic Forum tried to reassure investors that China was still a good place to do business.
China's decline will make it more dangerous, not less, Bret Stephens argues in Times Opinion.

Continue reading the main story

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ARTS AND IDEAS

The Elgin Marbles at the British Museum in London.Daniel Leal/Agence France-Presse — Getty Images

A bitter dispute

In the early 1800s, a British aristocrat brought some of the greatest treasures in antiquity home from Greece. The collection includes statues of Greek gods that once decorated the Parthenon in Athens. Today, we know them as the Elgin Marbles, which are on display at the British Museum and have become the subject of perhaps the world's most notorious culture dispute.

Britain says the marbles were legally acquired and are best shown alongside other artifacts in a museum. Greece says they are looted treasures and a foundation of national heritage. One Greek lawmaker called it a "matter of dignity for all Greeks."

The British Museum and Greece are getting closer to an agreement on returning them, The Times's Alex Marshall writes, but no deal seems imminent.

PLAY, WATCH, EAT

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This one-pan meal features bronzed chicken and braised greens.

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Now Time to Play

The pangram from yesterday's Spelling Bee was modular. Here is today's puzzle.

Here's today's Mini Crossword, and a clue: "Okay, that wasn't truthful" (five letters).

And here's today's Wordle.

Thanks for spending part of your morning with The Times. See you tomorrow. — German

P.S. Adrienne Carter, who improved this newsletter's China coverage as The Times's Asia editor, will become Europe editor.

Here's today's front page.

"The Daily" is about facial recognition.

Matthew Cullen, Lauren Hard, Lauren Jackson, Claire Moses, Ian Prasad Philbrick, Tom Wright-Piersanti and Ashley Wu contributed to The Morning. You can reach the team at themorning@nytimes.com.