China’s population is shrinking and its economy is losing ground

“HOW SHOULD one look at the Chinese economy?”, asked Li Qiang, the country’s prime minister, at the World Economic Forum in Davos on January 16th. “It is similar to looking at the Alps,” he suggested, an “undulating mountain range” that is best appreciated from afar. Official figures released the next day revealed two notable undulations in China’s economic landscape. The country’s population fell in 2023 for the second year running. And its GDP shrank in dollar terms.

In his previous job as Communist party chief of Shanghai, Mr Li oversaw a strict lockdown of the city to quell an outbreak of covid-19. After China abandoned such measures at the end of 2022, many people succumbed to the virus, although doctors were pressed to attribute their deaths to other causes. One academic model, drawing on Hong Kong’s experience, suggested the national death toll might have been as high as 1.4m between December 2022 and February 2023. The Economist’s modelling estimated that the virus would claim about 1.5m lives if left to spread unencumbered.