As the Chinese population continued to decline in 2023, the country's birth rate hit a new low. This pattern indicated that the world's second-largest economy was facing a more serious demographic crisis.

Wednesday, January 17, the National Bureau of Statistics (NBS) of China stated that the country's birth rate was 6.39 per 1,000 people, which is lower than the 6.77 recorded a year before. The birth rate had dropped to its lowest point since 1949 when Communist China was founded.

There were 9.02 million births, down from 9.56 million the previous year. The official tally for 2023 was 1.409 billion, a decline of 2.08 million over the previous year, according to the agency.

According to Larry Hu, chief China economist for Macquarie Group, "To be sure, last year's sharp decline should be partly due to the lockdowns and most likely new births will rebound in 2024, although the structural down-trend remains unchanged," as reported by CNN.

COVID-Related Deaths

Meanwhile, after Beijing relaxed its tight pandemic restrictions in 2023, the number of deaths increased and the number of births kept falling, causing the country's population to slide to a new record low.

According to Fortune, China reported 11.1 million fatalities, which is almost 690,000 more than the previous year's 10.41 million. A surge in COVID-related deaths in the months after the December 2022 suspension of the COVID-Zero policy by authorities, which caused an explosion of infections, is likely to blame for the rise.

Moreover, despite efforts by the government to relax birth restrictions that had been in place for decades, the number of babies being born is falling.

Also Read: China's 4th Quarter GDP Misses Market Estimates, But Hits Government's Target

Market Slowdown

The country's population is changing just as its economy is showing signs of a slowdown.

With an official goal of around 5% growth, NBS said China's economy actually expanded by 5.2% last year. Despite a marked improvement from 2022's 3% GDP growth, this expansion ranks among the nation's worst economic results in more than 30 years.

Following the report's publication on Wednesday, Chinese markets took a turn for the worse. Midway through the afternoon, the Hang Seng Index in Hong Kong fell 4.1%, aiming to close at its lowest level since October 2022. There was also a 2.2% decline in the CSI300, an index of 300 large-cap firms traded on the Shanghai and Shenzhen stock exchanges. The year 2023 was a disaster for both indexes, falling by almost 10% for each.

A number of economic issues, such as deflation and the flight of investors, have plagued China. Beijing might have to rethink its economy and overhaul industries like healthcare and housing as a result of the population decline.

Also Read: Declining US Birthrate Prompts Grim Warnings From Economists-Here's What They Say