Welcome back to the Dispatch Podcast. I'm Esther Eaton, deputy editor of the Morning Dispatch.

Today, we're taking a look at a big demographic change happening in China. For the first time since

the 1960s, China has recorded a population decline. In 2022, 850,000 more people died than were

born in China. And that's a trend that is only expected to continue, which has huge implications

for China and also for the entire world's economy. Here to explain these implications, we have

Scott Kennedy, an expert on China's economy at the Center for Strategic and International Studies.

So I think the first thing to touch on here is that it's actually very common for a country's

fertility rate to drop as it develops. So it's not necessarily shocking that this is happening to China.

So talk to me about why that is, why that's common, and then whether there are unique factors

about China's situation that are bringing its fertility rate down faster.

Countries' fertility rates always drop when they have two things that occur as the country's

urbanized and as more women get educated and into the workforce. And both of those things happened

around the world and in China. The vast majority of Chinese when communists took over in 1949

lived in the countryside, even when Deng Xiaoping started the reform era in the late 1970s, early

80s, you still had predominantly rural population where one in seven people on the planet

were from the Chinese countryside. But over time, China has become much more urbanized.

Even those who are classified as being from rural China, actually many of them live in small

towns and cities in China. And when we say small town and city, we're talking like two or 300,000

people. That's big in the context of the United States. So China is urbanized a great deal.

In addition, Chinese women are much better educated and have been heavily integrated in the workforce

than they were 50 years ago. Most Chinese students that go to college now are female.

And as women get better educated, it's a universal that they have less children. So you add urbanization

...