Why China's Shrinking Population Is a Problem for Everyone

China's population continues to shrink despite the harsh Mao-era restriction that limited families to one child. Even after recent incentives encouraging families to have multiple children, China is still losing its population. This will leave India the most populous country in the world and have a wide range of rippling impacts both at home and abroad.

China is now on a similar path to many of its Asian neighbors, aging and shrinking. But its change will have a far-reaching impact not only on the region's economy but also on the global economy.

Why economists are concerned about the current situation.

China's shrinking workforce could impede the global economy.

China's large population of workers has been a major economic force for many years. It has supplied the factories with cheap labor that produced goods exported all over the world.

A shortage of factory workers, caused by an educated work force in China and a declining population of youth, could increase costs for consumers in other countries, such as the United States, which rely heavily upon imported Chinese goods. Many companies are shifting manufacturing to countries with lower wages, such as Vietnam and Mexico, in order to avoid the rising costs of labor in China.