I just came across an interesting report on natural population growth in China over the coming decades. Tsinghua University and several other institutions have developed demographic forecasts up to 2100, and honestly, the numbers are quite shocking.

Let's start with what we know. In 1950, China had 552 million people. Since then, roughly every ten years, the population has increased by about 100 million citizens. Rapid growth occurred in the 1960s and 1970s, then family planning policies slowed the pace. In 2000, we reached a peak — 1.263 billion. Since then, natural population growth in China has been steadily declining. In 2020, the population was 1.411 billion, and it was already clear that growth was stopping.

Now, here come the forecasts. In the most realistic scenario, (the fertility rate of 1.05), the population in 2100 will drop to 460 million. This means a return to levels from nearly a century ago. If the fertility rate drops even lower to (0.72), the population will fall to just 320 million — less than in the USA. In such a scenario, China would rank seventh in the world population ranking. Even in the optimistic scenario, (with a fertility rate of 1.31), we would have 590 million people in 2100.

What caught my attention? In 2024, the number of births was 9.54 million, and the birth rate was just 6.77 per thousand. This means that natural population growth in China is already entering negative territory. According to forecasts, after 2025, we will be entering an era of population decline.

I see an analogy here with South Korea and Japan. In those countries, birth rates have also plummeted, and the reasons are similar — enormous economic pressure, high costs of raising children, competition in the labor market. Once, a child was a new worker for the family. Today, it’s a huge expense with no guaranteed return. People are simply too exhausted to think about starting a family.

What does this mean for the economy? Primarily, the real estate market will come under pressure. Fewer people mean less demand for housing. Of course, in large cities — Beijing, Shanghai, Shenzhen — inflows from smaller towns may keep prices relatively stable. But small towns and rural areas? They’re facing a crisis, especially those without attractive tourism or special functions.

If you work far from home, it might not be worth investing in a large house in your hometown. It’s better to think about the future for the next generation in a different way.

Things are only going to get worse. Small businesses that lack competitiveness will go bankrupt en masse. Labor costs will rise, and labor-intensive exports will lose significance. Society might fall into an "idle" ideology — less ambition, less dynamism. The pressure on people could decrease, but so will economic energy.

What about financial markets? The stock market in China is a bit like a legal casino. It’s driven by inflows of new capital. If China’s natural population growth becomes negative and the number of new market participants decreases, it could pose a problem for stock price growth. The same applies to cryptocurrencies — both markets operate cyclically, depending on new capital inflows.

Warren Buffett was right: when others are greedy, be cautious; when others are cautious, be greedy. But in times of such demographic uncertainty, every investment is a gamble in the dark. The future is unpredictable.