China’s baby bust is happening faster than many expected, raising fears of a demographic collapse. And coping with the fallout may now be complicated by miscalculations made more than 40 years ago.

The rapid shift under way today wasn’t projected by the architects of China’s one-child policy—one of the biggest social experiments in history, instituted in 1980. At the time, governments around the world feared overpopulation would hold back economic growth. A Moscow-trained missile scientist led the push for China’s policy, based on tables of calculations that applied mathematical models used to calculate rocket trajectories to population growth.

Four decades later, China is ageing much earlier in its development than other major economies did. The shift to fewer births and more elderly citizens threatens to hold back economic growth. In a generation that grew up without siblings, young women are increasingly reluctant to have children —and there are fewer of them every year. Beijing is at a loss to change the mindset brought about by the policy.

Births in China fell by more than 500,000 last year, according to recent government data, accelerating a population drop that started in 2022 . Officials cited a quickly shrinking number of women of childbearing age—more than three million fewer than a year earlier—and acknowledged “changes in people’s thinking about births, postponement of marriage and childbirth.”

Some researchers argue the government underestimates the problem, and the population began to shrink even earlier.

Following the data release, researchers from Victoria University in Australia and the Shanghai Academy of Social Sciences predicted that China will have just 525 million people by the end of the century. That’s down from their previous forecast of 597 million and a precipitous drop from 1.4 billion now.

“Our forecasts for 2022 and 2023 were already low but the real situation has turned out to be worse,” said Xiujian Peng, a senior research fellow at Victoria University who leads the population research in Melbourne.

China’s fertility rate is approaching one birth for every woman , less than half the 2.1 replacement rate that keeps a population stable. In the late 1970s, the fertility rate hovered around 3.

At the time, China was coming out of the chaos of the Cultural Revolution and about to embark on economic reforms. The country’s leader, Deng Xiaoping, and other officials became alarmed when a group of scientists told them that unless they started restricting births, China would have more than four billion mouths to feed in a hundred years.

An essay by some of the scientists published by the official People’s Daily in early 1980 suggested China’s search for a response to overpopulation “points to bringing the fertility rate down to 1…each couple having only one child.”

That fall, China started enforcing the one-child policy nationwide—but the calculations had missed some crucial factors.

Population fears

China wasn’t the only country worried about overpopulation at the time. The rapid rise in the global population in the 1960s and ‘70s prompted fears that humanity would reproduce faster than food production could rise, an idea argued nearly two centuries earlier by economist Thomas Malthus.

Chinese officials were increasingly reviving scientific research after the Cultural Revolution. While social scientists had been persecuted by Mao’s Red Guards, others doing work related to the military had been partly shielded.

The group included Song Jian, a protégé of the father of China’s atomic-bomb program and one of China’s top scientists working on satellites and rockets. Song had studied in Moscow, where he got advanced degrees in a branch of mathematics known as control theory and in military science. Military officials sent him to a launch site for rockets and satellites in the Gobi Desert to escape the chaos of the Cultural Revolution.

Song, who eventually became China’s senior cabinet member heading science and technology, is now 92. He didn’t respond to requests for comment sent to the State Council and the Chinese Academy of Engineering.

In 1975, Song had been part of a Chinese academic delegation visiting the University of Twente in the Netherlands, where he got to know a Dutch mathematician, Geert Jan Olsder. Three years later, the two met a second time, at a conference in Finland.

Olsder, now in his 80s, said he talked about how his research with other mathematicians had been inspired by the warnings about finite global resources and how mathematical models could be applied to birthrates.

Song spoke with the others in fluent English and showed a clear interest in mathematical modelling, Olsder wrote in an email. If the two hadn’t met, he said, he’s sure that some kind of population policy would have started in China, but perhaps a little later. “I feel like a domino stone in a long series of such stones,” he wrote.

Song refined his modelling over the next few years, and with a team of scientists began calculating how different fertility rates could affect China’s population size. In late 1979 he began to present officials with reports based on their modelling. He calculated that, at a constant fertility rate of three babies for every woman, China’s population would hit 4.26 billion by 2080.

With his computer-assisted mathematical models and political connections, Song caught the attention of top leaders. He argued that rapid population growth would prevent China from becoming a rich, modern country, said Susan Greenhalgh, an anthropologist at Harvard University who has written books about the one-child policy.

“He used a frightening narrative of a coming demographic-economic-ecological crisis to persuade people,” she said.

To ward off skepticism, officials said China could switch gears if births dropped too much. “In 30 years, the current problem of especially dreadful population growth may be alleviated and then [we can] adopt different population policies,” the Communist Party said in an open letter in 1980.

Within a little more than a decade, the fertility rate had dipped below the replacement rate. The cohort of young women was still massive, which kept the population growing. But the number of newborn girls was quickly dwindling.

Impact

As the decades passed, a growing number of demographers and economists called out the policy as outdated and flawed. China’s fertility rate would have gone down on its own as life expectancies rose and economic conditions improved, they say.

One factor missing from Song’s population math was human behaviour. The government’s sometimes brutal enforcement, including forced abortions and sterilisations, as well as decades-long propaganda about the benefits of having a small family , left a lasting one-child mindset. The modelling also failed to take into account the traditional preference for sons. If couples could only have one child, they would prefer to have a boy.

Young women are now at the core of China’s demographic dilemma. They are increasingly reluctant to have children—and there are fewer of them every year.

Greenhalgh, the Harvard anthropologist, said that the women growing up under the one-child policy were raised in line with Beijing’s goals of a smaller but what it called “higher-quality” population: well-educated, savvy and independent. “These women are not going to accept going back to the family to be housewives,” she said.

Apart from cultural and social changes, Song’s model hadn’t taken into account economic forces, such as the enormous migration flows to cities unleashed by Deng’s reforms, which played a bigger role than anyone had imagined in pushing down fertility rates, researchers have said.

Zuo Xuejin, a retired demographer who is leading the research team at the Shanghai Academy of Social Sciences, sounded alarms about demographic implosion more than a decade ago, saying the conditions that may have warranted birth-restriction measures had all faded away.

“For many years overpopulation was China’s major concern. It was difficult to convince the government and the public that China will have the problem of fast decline and aging of the population,” Zuo wrote in an email.

Song has said he believed it had been a good call. China had successfully defused the bomb that could have led to a “population explosion,” he wrote in a 2010 essay published by the University of Jinan, his alma mater. “Zero growth [in population] is the destiny of modern mankind and an urgent task for contemporary China,” Song wrote. He estimated China’s population wouldn’t start shrinking until after 2035. He was off by more than a decade, with official data showing the drop starting in 2022.

Beijing has said the policy prevented 400 million births, a claim it has often put forth as a kind of Chinese gift to the world, including at the 2009 climate summit in Copenhagen. Demographers have disputed the figure, saying China’s fertility rate would have gone down on its own as economic conditions improved.

Demographer scramble

Even when Beijing dropped the one-child policy in 2015, leaders didn’t abolish birth restrictions altogether. Instead, it just pivoted to a two-child policy. Now, Beijing is urging people to have three, trumpeting the need to return to a “birth-friendly culture.”

Entrepreneurs, economists and demographers have tried to convey the idea that China needs more babies .

James Liang , co-founder and chairman of travel service provider Trip.com Group and a research professor of economics at Peking University, co-founded YuWa Population Research Institute, a private think tank focused on demographic and public policy analysis.

Liang estimated that China needs to devote 5% of its gross domestic product—roughly equivalent to its education spending—on direct subsidies to promote births and lower the costs of raising children in order for the fertility rate to recover to 1.4, the average rate of advanced economies. His company gives its long-term employees an annual cash bonus of 10,000 yuan ($1,406) for each of their children until they are 5 years old.

Demographers are trying to catch up on the rapidly falling births. The United Nations’ population predictions for China, which were based on the country’s 2020 census and assumed a fertility rate of 1.19, are already out of step with reality.

Patrick Gerland, head of the U.N.’s population estimates and projection section, said their computing tries to capture long-term trends and isn’t made for rapid changes. He agrees with other researchers that put China’s fertility rate closer to 1.0.

“In the case of a country like China where the fertility from one year to the next year has been changing so fast, we’ll have smaller population [projections] than what we had expected two years ago,” he said. The U.N. plans to update its forecasts in July.

Yi Fuxian, a senior scientist in obstetrics and gynaecology at the University of Wisconsin-Madison and a critic of China’s birth restrictions, has long argued the situation is even worse than official data suggests. Yi believes China’s population actually started shrinking years ago, based on birth estimates pieced together from other available data, such as school enrolment and the number of vaccines for newborns.

“All of China’s population policies for decades have been based on erroneous projections,” Yi said. “China’s demographic crisis is beyond the imagination of Chinese officials and the international community.”

Once a generation of young people has made up their minds, it’s hard to change them, said Cai Yong, a sociologist at the University of North Carolina at Chapel Hill.

It’s possible fertility rates could now increase with official messages and policies promoting bigger families to a newer generation, said Cai, but “if it’s going to happen, it’s not going to happen in the short term.”

China’s massive rollout of renewable energy is accelerating, its investments in the sector growing so large that international climate watchdogs now expect the country’s greenhouse-gas emissions to peak years earlier than anticipated—possibly as soon as this year.

China installed 217 gigawatts worth of solar power last year alone, a 55% increase, according to new government data. That is more than 500 million solar panels and well above the total installed solar capacity of the U.S. They appeared everywhere from the deserts of Inner Mongolia to the mountains of southwest China to rooftops across the country, including on the Great Hall of the People on the edge of Tiananmen Square.

Wind-energy installation additions were 76 gigawatts last year, more than the rest of the world combined. That amounted to more than 20,000 new turbines across the country, including the world’s largest, planted on towers in the sea off China’s east coast.

The low-carbon capacity additions, which also included hydropower and nuclear, were for the first time large enough that their power output could cover the entire annual increase in Chinese electricity demand, analysts say. The dynamic suggests that coal-fired generation—which accounts for 70% of overall emissions for the world’s biggest polluter—is set to decline in the years to come, according to the Paris-based International Energy Agency and Lauri Myllyvirta , the Helsinki-based lead analyst at the Centre for Research on Energy and Clean Air.

China’s expanding renewables footprint is shaping the global response to climate change. Its companies are the leading manufacturers of clean-energy technology, from solar panels and wind turbines to electric vehicles. That is stoking concerns in the rest of the industrialized world about depending on China for their energy supplies in the future.

At the same time, China’s deployment of renewables at home is breathing new life into international climate diplomacy . Its rapid emissions growth long provided fodder for critics who said Beijing wasn’t committed to fighting climate change or supporting the Paris accord , the landmark climate agreement that calls for governments to attempt to limit warming to 1.5 degrees Celsius over preindustrial temperatures. Now, analysts and officials say Beijing’s efforts are lending momentum to the Paris process, which requires governments to draft new emissions plans every five years.

“An early peak would have a lot of symbolic value and send a signal to the world that we’ve turned a corner,” said Jan Ivar Korsbakken, a senior researcher at the Oslo-based Center for International Climate and Environmental Research.

In 2020, Chinese leader Xi Jinping pledged that the country’s emissions would begin falling before 2030 and hit net zero before 2060, part of its plan prepared under the Paris accord. He also said China would have 1,200 gigawatts of total solar- and wind-power capacity by the end of this decade. The country is six years ahead of schedule: China reached 1,050 gigawatts of wind and solar capacity at the end of 2023, and the China Electricity Council forecast last month that capacity would top 1,300 gigawatts by the end of this year.

“China’s acceleration was extraordinary,” said Fatih Birol , the executive director of the Paris-based International Energy Agency.

Chinese authorities publish regular data on energy consumption and generation but not overall greenhouse-gas emissions. Transition Zero, a U.K.-based nonprofit that uses satellite images to monitor industrial activity and emissions in China, says the official data are “broadly aligned and consistent” with theirs.

Once the peak arrives, some analysts expect an emissions plateau to follow rather than a rapid fall in the following years. That is a problem, scientists say, because the world’s major emitters must sharply cut global emissions this decade—by 43% compared with 2019—to fulfill the Paris accord.

Climate Action Tracker, a scientific consortium that evaluates governments’ emissions plans, rates China’s current policies as “highly insufficient” to meet the 1.5 degrees Celsius goal . Its latest analysis, published in November, says China’s emissions should peak by 2025. If wind and solar installations can average 300 gigawatts a year—as they did last year—China’s emissions should fall significantly by the end of the decade, the consortium says. The actions and policies of the U.S., where emissions have been falling, were graded as “insufficient.”

Still, moving China’s timeline for an overall emissions peak forward could shave off around 0.3 to 0.4 degrees Celsius of projected global warming if emissions started to decline next decade, analysts say. Emissions plans submitted to date under the Paris accord would put the world on track to warm by 2.5 degrees Celsius this century, a United Nations Environment Program report said in November.

China is still building coal-fired power plants , fueling criticism from Western officials that it is locking in carbon-dioxide emissions years into the future. Beijing has been telling Western officials that the new plants won’t be as polluting as they fear. They are replacing older, higher-emitting plants, and will run far below full capacity, used largely to maintain electric-grid stability as China generates more of its power from intermittent wind and solar. In November, China unveiled a system of capacity payments for coal-fired plants that will allow them to earn money even when they are running as backup power sources. Xi said in 2021 that China would begin to phase down its coal consumption starting in 2026.

The exact timing of China’s peak depends on factors such as economic growth and weather in the next few years, analysts say. Growth is expected to slow following China’s real-estate sector slump —unless Beijing undertakes a major new program of economic stimulus that would boost industrial emissions. Another spell of drought this summer would push the country’s coal plants to run harder to replace lost hydropower generation.

The most certain variable in the equation is the breakneck pace of China’s renewable-energy rollout, which analysts expect will continue to add 200 to 300 gigawatts of new wind and solar capacity a year. The investments in renewable energy have become a major driver of the Chinese economy. The country’s clean-energy spending totaled $890 billion last year, up 40%. Without that growth, investment in China would have been flat as the country reels from the slump in its real-estate sector, according to the Centre for Research on Energy and Clean Air.

The investments include clean-energy installations and the construction of enormous factories to produce solar panels, wind turbines, batteries and electric vehicles—turning the country into the leading manufacturer of clean tech. Its factories in those sectors now have plenty of unused capacity . The adoption of electric vehicles is happening so rapidly that analysts say peak gasoline demand in China was already reached last year.

At the United Nations COP28 climate conference in Dubai in November, Xie Zhenhua , then China’s climate envoy , said the government would calculate the year and absolute volume of the country’s emissions peak. He also said Beijing is drawing up its next emissions plan under the Paris accord.

“Our country will do as it’s said and strive to do even better,” he said. “I have faith.”

The parents have been paying the monthly phone bill and covering rent for far longer than in prior generations . Some are helping their children with down payments to buy homes. Others are putting a roof over their kids’ heads well into their 20s and 30s to help them save because they can’t cover rising costs of living.

That comes with a price tag. More than a quarter of parents who are helping their children financially said it caused them to postpone retirement, according to a recent Credit Karma survey . More than half had to cut back on living expenses and about a third took on debt.

Feeling stretched, they are negotiating the terms of separation.

Nancy Clark and her then-28-year-old son, Reid Clark, had just sat down to dinner in June 2022 when the conversation turned to when he would move out. The topic had come up before, but this time they decided to set a date one year later.

Nancy, now 60, said she remembers thinking: “I know that becoming financially independent needs to feel a little painful.”

Reid set off on his own last June. He ditched a job managing his family’s three ice cream shops in New Hampshire for a gig as the assistant to a professional ice hockey team’s mascot in St. Paul, Minn. He also works at an M&M’s store.

Nancy bought him groceries when he moved in and occasionally gives $50. By this June, Reid will no longer get any financial help if he’s short. He hasn’t needed to hit up his mum for rent money in the past few months. “I want to chart my own path in life,” he said.

Taking such a gradual approach and framing the conversation around gaining financial independence give it a positive spin, said Rocky Fittizzi , a wealth strategies adviser at Bank of America Private Bank. Telling your children you’re cutting them off suggests it is a punishment.

An emotional decision

Many adult children are living at home, or moving back in, to save money. The cost of food and rent have jumped, and more college graduates are saddled with student debt. The share of 25-to-29 year-olds with student loans rose to 43% in 2022 from 28% in 1992. The rise was even bigger for those between 30 and 34, according to a recent report by the Pew Research Center.

Some 20% of men and 12% of women between 25 and 34 years old lived at home last year, far higher than two decades ago, according to Census Bureau data.

During the pandemic, layoffs and money strains forced some adult children and their parents to live together and share finances, said Arne Boudewyn at Insights Squared Consulting Group, a family wealth consulting company.

Worries over losing the close bonds forged during those years may add to the stress of ending monetary help, financial advisers said.

“Letting go is often harder for parents these days because we need to feel needed as much as we want to feel wanted,” said Bobbi Rebell , the founder of Financial Wellness Strategies, which gives workshops for parents about how to teach their children to be financially responsible.

Tough love, but not too tough

Pam Lucina still remembers the day about 30 years ago when her father told her she was off the payroll. She was in her first year of law school. Her parents had paid for her undergraduate education. Because she assumed they would pay for law school too, she had chosen a pricey school.

She graduated with $40,000 in student debt and couldn’t afford to contribute to her 401(k) for about five years.

“I know that my parents sacrificed to give me what they did and I’m grateful for all of their past support but I wish I had been more prepared,” said Lucina, 52, now an executive vice president at Northern Trust .

Lucina said the experience was a main reason she became a financial adviser. She has three daughters, and recently asked the oldest to complete her own college financial-aid form.

She tells clients that even if they have good intentions when cutting off their kids, it can feel to the children as if their parents are withholding money to punish them.

“Assure them that love is not contingent on finances,” she said.

Create an exit strategy

There are times when financial help is necessary. With a health issue or addiction, parents often use a special needs trust, where funds typically go directly to the child’s treatment and recovery. Others may opt to help children temporarily after a layoff.

But financial advisers said parents need to set boundaries.

Ashley Kaufman ’s parents told her she would need to move out of their Manhattan apartment, where she was living rent-free, once she saved $100,000 for a down payment on her own place.

The cybersecurity consultant hit her goal by the time she was 25, but she wasn’t sure she was ready to move out right then. She enjoyed seeing her younger siblings regularly and playing with her family’s dog named Waffles, she said. Her parents encouraged her to go to some open houses anyway.

Kaufman, who is the stepdaughter of Rebell from Financial Wellness Strategies, is now 27. She bought her apartment around two years ago.   She’s happy to be building equity in her place.

“I’m glad my parents gave me a little nudge,” she said.

—Julia Carpenter contributed to this article .

Over the past year, I’ve watched as one friend lost a job, another scored a life-changing bonus, two took huge pay cuts and yet another sold a home at a large profit. As for me, my financial life sort of stayed the same. But what did all this mean for my friendships?  An individual change in someone’s financial situation can have ripple effects throughout our greater social groups and wider peer networks, researchers and therapists say. One person’s financial loss and another’s sudden windfall can affect the ways in which we stay connected with our friends, and fights about money can lead to personal money problems or even friend breakups.

“The perception is ‘Oh, we’re on the same path,’ and as you get older, that’s not the case,” says Blake Blankenbecler , a financial therapist and friendship educator. “There is space to talk about it with your friends. But can it be cringy to talk about? Yes. Is it important to talk about? Yes.”

Humans typically gravitate toward people who are similar to us in some way, and we cling to that sense of similarity as the friendship grows and changes, says Rebecca Adams , professor of social work at the University of North Carolina-Greensboro. Individual privileges like family money, inherited wealth and more don’t always mean that perception is accurate, of course; but at the onset of a friendship, this sameness breeds closeness.

A growing divide

When we meet in college (as I met the folks now making up one of my oldest and dearest friend groups) or deskside at a job (how I bonded with two of my newer besties) we perceive ourselves to be on equal financial footing with the people we hold close. We chased down bargain-store deals and planned ad hoc dinner parties of rent-week leftovers. During an internship in New York, my best friend and I crammed together in the world’s tiniest sublet, subsisting off Trader Joe’s coupons and our dreams for the future.  But more than a decade removed from those days, our financial lives have branched in all sorts of different directions. As we grow—or not—in our respective careers, these gaps in income and wealth will only widen, says Rhaina Cohen , a podcast producer and author of the coming book on friendship, “The Other Significant Others.” But we’re also loathe to change our behaviour or discuss how these individual ups and downs will affect the glue holding the friend group together.

“In my early mid-20s, people were pretty open about what they could and couldn’t afford, and things being expensive, but I think as people have risen up the career ladder, there is less conversation about that,” Cohen says. “The awkwardness of acknowledging that people are in really different places keeps people from having those conversations. But as we get older, these divides are more likely to crop up.”

Opening up the conversation

More often than not, the friend who’s suffered a financial setback feels the burden of communicating their new needs to the group—but doing so can be much, much harder to put in practice.  Ashley Appelman , a 36-year-old living in Washington, D.C., took a significant pay cut after making a big career transition a few years back. At the time, her social calendar stayed packed with numerous friends’ weddings and bachelorette parties. Rather than bow out of these commitments or suggest cheaper alternatives, she decided that putting flights on her credit card and forgoing her savings goals was worth avoiding awkward conversations and pitiful glances.

“You don’t want to disappoint people,” she says. “I have given into so many things where I didn’t really have the budget, and I just did it.”

In her four decades of financial advising, Eileen Freiburger , managing director of the Garrett Planning Network, says she has often seen people’s behaviour change after a big money move in either direction. The friend in a lower-paying job finds themselves spending far outside their means, or the pal with more in the bank feels guilty after picking the expensive restaurant for dinner.

“Who you surround yourself with and your own value system will actively impact the next stages of how you handle your money,” Freiburger says. “Are you picking up those tabs because suddenly you can? Are you trying to spend with the Joneses?”

From her perspective, she has seen immense value in holding on to people who can ground you in your original values system, the rules you lived by before these “life happens” moments rocked your financial life. Sometimes, these people are the old friends from before; other times, they’re new friends you make after.

Finding the path forward

Financial advisers and friendship educators agree: Whichever side of the financial divide you now find yourself, the way forward for many true friendships is having more open, honest conversations about money and how it affects our relationships.  These don’t have to be scary or stilted discussions, Cohen says, and they don’t have to happen in overtly formal, intimidating settings.

She recommends using a real-life example to open up a bigger conversation. For instance, if you’re buying tickets to an event, ask your friend how much money they plan to spend and why. That, in turn, can kick off a much deeper conversation about your relative finances. Cohen recommends a thoughtful line that struck me as especially empathetic and easy: “What would be helpful from me to make sure we’re on the same page about what we do together and how we spend money?’”

“There is so much that goes unsaid in friendship,” she says. “What I would want people to do is talk, to have open conversations with their friends about big transitions and big differences.”

Personally, I’ve been the friend in both positions: the richer friend and the definitely-not-rich one.  I recently passed on a luxe vacation with one set of dear friends. I agonised over the decision, fantasising about suddenly finding a great flight deal or stumbling upon a can’t-miss hotel deal. After enough hours staring at travel booking sites, though, I knew my budget just couldn’t stomach it. And even though my friends understood—and of course they did! They’re good friends for a reason!—I had to hype myself up to send the “Hey guys, I’ve been thinking about our trip…” text.

Admitting I had to back out felt like a tiny failure, like I wasn’t as committed to the friendship as I had been in years past.  But when another pal recently took a large pay cut as she pursued a more demanding—and lower-paying—career, I found myself on the other side of the table. After a handful of conversations about her reduced salary and inflexible schedule, I remembered my own struggle to send that text. I took the initiative to bring up the new discrepancy, suggesting we move our usual dinner-and-drinks hangouts to a lower-key TV night in.  Six months later, I have to say: Both of our budgets are happier for it.