China may be the only nation that could rival America’s economic dominance. But its long-term prospects will potentially be cut off at the knees by a fundamental flaw: It won’t have the people to keep its growth going.
According to a new report from Oxford Economics, the potential output growth for China could fall from around 4% in the 2020s to less than 2% by the 2050s.
That’s on account of the country’s labor force shrinking at an advanced rate, with its fertility rates falling below “replacement levels” where new workers equal the amount of individuals leaving employment.
But not only is there the fundamental issue of not having enough people to do the legwork to keep the economy moving, there’s also the knock-on impact of lower consumption—and hence less business investment, a slower pace of innovation, and increased government debt as leaders seek to support an older population with fewer people to provide for them.
“As populations age, the younger cohorts are often smaller than older ones due to declining birth rates. This raises the dependency ratio, with fewer working-age people supporting a growing number of retirees,” wrote Oxford Economics’ Marco Santaniello and Benjamin Trevis late last week. “We anticipate this pressure being felt most acutely in developing economies like China and Brazil, where populations are still relatively young but ageing fast.”
Indeed, per the World Population Review, China’s birthrate was 7.24 live births per 1,000 people in 2025. By contrast, this figure stood at 11 in the U.S. In comparable nations like Canada, the birthrate stood at 9.82 per 1,000 people, and 10 per 1,000 people in the U.K.
As a result, per Oxford Economics’ calculations, the dependency ratio in China (the working age population aged 16+ compared to people aged 65 or older) will shift by 60 percentage points between 2010 and 2060.
In Thailand, this figure sits at a little over 40 percentage points, while Brazil sits at approximately 35.
By contrast, the United States sits at a little over 10 and the United Kingdom at approximately 15, though the economists point out that “Dependency ratios in developed economies will rise more slowly… because developed economies are already experiencing rising dependency ratios, so the starting point is higher.”
Developed economies also have a further option available to them: Powering their GDP with labor gathered from around the world.
“Immigration helps ease some of the strain by increasing the working-age population. For example, we have shown that in the U.S., if immigration grew from 1.1mn in 2023 to 1.5mn by 2033 and stabilised thereafter, it would provide a notable boost to economic potential by 2050,” Santaniello and Trevis explained.
The retirement question
In developed nations like the U.S, the conversation about declining birthrates and aging populations is already in the mainstream.
On fertility, for example, the world’s richest man Elon Musk has already weighed in. Responding to a post about declining American birth rates on his social media site X earlier this year, Musk wrote, “Low birth rates will end civilization.”
Likewise, figures like BlackRock’s Larry Fink have called on the government to begin a national conversation about the public’s need to save for retirement, instead of relying on the state for support.
He told CNN earlier this year: “One of the fundamental problems in America is, retirement’s not that bad of a problem for the top Fortune 500 companies. We are providing enough support to our employees where they’re getting the adequacy of retirement.
“It’s beyond that, we refuse to talk about how do we get more broadening of our economy with more Americans participating in that. That’s why we have to have a conversation in Washington, this has to be considered a national priority and a national promise to all Americans.”
To this end, the Oxford Economics report shows, America’s debt-to-GDP ratio could spiral beyond 250% by 2060 as the government tries to keep up with payments to support its aging population.
“In economies with less-developed social safety nets, the burden of ageing populations increasingly falls on households via informal caregiving responsibilities,” the economists wrote.
Meanwhile, in nations with more “generous” welfare systems: “Without reform, such as raising retirement ages or boosting labour force participation, many welfare systems risk becoming unsustainable. In our scenario, public debt rises sharply across most advanced economies and in several emerging markets. Heavily indebted countries will be least able to absorb the economic impact of demographic change, and will struggle to respond to future downturns with limited fiscal space.”
