PRC growth now based on educated population, which exploded, not total population. Reality is every tertiary median to upper middle class wage is more productive than 10 undereducated peasants... the ones first to age out. There's like 200-400m+ bluntly useless mouths dragging down productivity/per capital metrics, the only saving grace they did NOT get rich before old, i.e. poor old so it's cheap(ish) in terms of resources (but not labour) to support them. Put it this way, PRC is generating OECD combined in tertiary, disproportionately STEM, they have backlog of 200m births from last 20+ years that still haven't got their masters/phds... at 60% and increasing tertiary we're going 100m+ high end talent, aka the greatest high end human dividend in recorded history who will be in workforce for until 2060s, i.e. so far out its hard to project based on present realities, only they have no shortage of advanced economy growth potential. Like if you throw all projected US newborns + immigration into STEM... PRC would still come out FAR ahead. There is no contest, unless AGI displaces everyone.
TFR real issue probably 30 year out. There will be some rebound, current crashing TFR because so many entering tertiary last few years = delay family formation. Women going to turn 35-40 and realize they want kids... and have them, especially considering 1:4 dependency ratio also = 4:1 wealth transfer + property going other way when previous generation (with high savings rate) dies. But won't get to replacement level. Then it's matter of what bad levers PRC willing to pull - pro natal fertility policies does not incentivize 2.1 TFR... and no one has tried punitive policies, i.e. limit wealth/property transfers to families with 2 kids... all sorts of inducements liberal societies haven't... or politically can't try. Or immigration, test tube babies, who knows. But IMO they try punitive policies first. That's really the only thing that no one has tried, and we know from wealthy Muslim countries with oil money, religious incentive, domestic help... aka every support imaginable, TFR is below 2 or trending towards it.
This isn't just a question of dropping labour, but also a question of the consequent reduction in economic demand.
Which is why China started reacting to the low fertility rate already in 2013 by abolishing the agency responsible for enforcing the one child policy, followed by ending the policy in 2015, replacing it with a 2 child policy, which failed to have the desired effect, followed by a 3 child policy in 2021, followed a month later by removing all penalties for having even more children.
China's workforce also is at most years from starting to contract excluding any immigration - the cohorts retiring are close to the size of those entering the workforce and the cohorts retiring will be increasing for another 20-30 years, while the ones entering the workforce will be decreasing for the same period even if they somehow figured out how to reverse it today.
> started dropping
This presumes PRC wants to maintain 1.4b baseline - imo it doesn't. Currently only ~800m people are actually productive. Initial decades of population drop will be disproportionately shedding bottom quantiles of old / uneducated / could not be incorporated into modern economy. Bluntly they're useless bodies - there's a reason PRC has 200m farmers... when 20m +machines will do. Or 100m other make work jobs for idle aunties and uncles. If PRC not aiming to maintain 1.4b... frankly considering mainland resource stress per capita they shouldn't, then it's fine and preferable to bleed pop for a while.
> reduction in economic demand.
No, this orthodox economic idiocy. The bottom 2 quantile constitutes like 5-10% of GDP. They are/will never big sources of demand to be begin with. More than offset by generating 100m productive advanced workers who has 10-20 times the income/spending power. Of course not all demand same, but in aggregate better to trade a 4 rural grand parents living on pittance of governance transfer and savings for tier1-2 stem chad who will add more value and out spend lifelong vs turnip eaters. Cohorts are not economically equal, sometimes grossly so. Of course you can't simply liquidate them, but doesn't mean governance will miss them when they expire.
> years from starting to contract
Consider 2 framings:
1. orthodox: PRC workforce decrease by 30%. Line must go down. 2. reality: PRC workforce optimizes to be 100% more productive with 30% less head count, by trimming all the fake work jobs doubling their their productive staff. Line goes up.
Again cohort size less important than cohort profile/productivity/composition etc. On way out - mostly old, unskilled, farmers, informal workers - the who gamut of make work economy that nets single digit percent of GDP that gov BEGRUDINGLY supports because people need jobs - it does not mean state/economy needs those people. Many of these are jobs that policy makers wanted to automate away for years but could't, like PRC agri literally being held hostage for years to cater to small plot armer inefficiency.
The only real labour shortage is skilled bluecollar/vocational, and that's mostly because new gen Chinese kids are too proud to work dirty jobs, hence contradictory youth unemployment problem. There's plenty of domestic bodies to staff workshop and worksites. PRC just in mass tertiary transition cultural adjustment period where grad would rather do flexible gig economy while looking for god job than demean themselves with peasant work. This new phenomenon, scaled to tertiary explosion timelines, they'll eventually give up / come around.
Now of course long term demographic / fertility management important and pop cannot crash too hard. But understand PRC now, all the involution, costs, delay to family formation is because they front loaded talent generation so hard that there is fancy degrees + air conditioned jobs mismatch. In 20-30 years structural forces that converge is pop down, housing cheap from oversupply, wealth transfers, signs of future labor shortage... i.e. all signals that stack up to say, if you have kid now, they going to be cheap to raise and guaranteed job in future by virtue of no competition. Basically inverse of current decision making.
Again that just shifts curve - does not get to replacement, like ultimately countries that don't want mass immigration have to figure out other inducements. But that's too in future to usefully project, i.e. we could be spamming test tube babies in state orphanages.
In the 21st century, that is definitely something I'd bet on China for being able to do. Across all sorts of problems.
The solution is going to be paying people. No, more than that. No, keep going. Higher. Market-clearing price.
It could get very dark very quickly if it turns out to be too hard to induce enough people who actually would want children under the right circumstances to choose to have them.