According to the latest demographic data of the National Bureau of Statistics, China's population began to decrease in 2022. The reason behind it is the same as the aging and declining birthrate in other developed countries, and this is an inevitable long-term trend. Many people worry that the population reduction and aging will make China's economic competitiveness decline. However, the reality of population change and economic development in Japan, Germany and Taiwan tells us that there is no need to be so pessimistic. Population decline is not necessarily a bad thing.
This paper first introduces the theory of Douglas North, the Nobel laureate in economics: population and military technology are two factors that promote institutional change. Changes in the number and structure of the population will promote changes in the social organization structure, thus evolving a more adaptive social system and promoting economic development. Then, it analyzes some positive effects that population decline may bring, such as reducing the pressure of population on the environment and ecosystem, aging pushes market entities to increase investment in research and development, getting rid of the curse of resources and promoting industrial upgrading. Finally, the article summarizes that we need not worry about the decline of economic competitiveness under the circumstances of population aging and population decline, and prompts us to pay attention to the problems that need to be paid attention to in industrial transformation and upgrading.
