FirstFT: China’s population drops in historic shift

China’s population fell in 2022 for the first time in six decades, while economic growth for the year missed Beijing’s annual target.

The population decline is expected to have long-term consequences for the domestic and global economies, as the world’s most populous country has long been a crucial source of labour and demand.

The National Bureau of Statistics said total population fell by 850,000 in 2022 to 1.41175bn. The decline officially began last year, when deaths outstripped births, but some demographers argue that the trend is likely to have started before then.

Last year, 9.56mn babies were born, down from 10.62mn the previous year. The birth rate in 2022 was the lowest since records began more than seven decades ago — 6.77 births for every 1,000 people, down from 10.41 in 2019.

China’s strict zero-Covid policy of containing coronavirus is widely seen to have accelerated the fall in the country’s birth rate, as couples delayed or decided against having children.

The anti-pandemic strategy, which was abruptly abandoned last month, has also been blamed for an economic slowdown. China’s gross domestic product expanded by just 3 per cent in 2022, well below the government’s target, which at 5.5 per cent was already the lowest in decades.

Five more stories in the news

1. Western banks struggle to exit Russia Advisers to western banks trying to exit Russia say a law introduced by Vladimir Putin is disrupting sales and allowing deals to be hijacked by businesspeople close to the Kremlin. Putin last year said foreign owners from “unfriendly” countries could not complete deals without his approval. The list of affected companies includes 45 banks with subsidiaries in Russia.

2. UK tax billions go uncollected Billions of pounds of tax are being left uncollected in the UK because almost 2,300 HM Revenue & Customs tax compliance staff have been transferred to work on Brexit and Covid-19 schemes. Tax revenue recovered for 2021-22 fell by more than £6bn compared with the year before, Treasury minister Victoria Atkins revealed.

3. Scholz under pressure to appoint new German defence minister German chancellor Olaf Scholz may struggle to fill the defence minister position after Christine Lambrecht quit yesterday following a series of gaffes. Her departure comes as Berlin faces a momentous decision on whether to send tanks to Ukraine — and whether or not to allow other European nations to do so.

4. Investigators arrive in Beirut for corruption probe Investigators from Germany, France and Luxembourg have arrived in Lebanon to probe the country’s powerful central bank governor Riad Salameh, along with dozens of others in connection with allegations of state corruption. At least five European countries are investigating Salameh on suspicion of laundering public money.

5. Russian paramilitary defects Andrei Medvedev, a former Russian paramilitary fighting in Ukraine, has promised to give evidence against the notorious Wagner group after making a dramatic escape and seeking asylum in Norway. Medvedev, who says he was a Wagner commander, is the first former member of the unit known to have defected to the west since the war started.

The day ahead

Economic data The UK publishes monthly labour market statistics, as well as December insolvency statistics. Germany, Italy and Canada release inflation data.

Oil markets Opec publishes its monthly oil market report.

Ecofin meeting The EU’s Economic and Financial Affairs Council meets in Brussels, with Russia’s war on Ukraine on the agenda.

Corporate results UK grocery tech group Ocado releases fourth-quarter numbers. Sales are expected to fall for the first time in its history. Other companies reporting include Alliance Pharma, Citizens Financial Group, Crest Nicholson, Experian, Goldman Sachs, Hays, Lindt & Sprungli, Morgan Stanley, THG and Wise.

Whitbread’s new chief Dominic Paul becomes chief executive of Britain’s biggest budget hotel operator, succeeding Alison Brittain, who leaves after seven years at the helm.

Davos day two The annual forum continues today. Tune in to the Davos Daily Show, hosted by the FT’s Andrew Hill, from 12pm GMT January 17-19. Register here for free.

Fashion Week Men’s Fashion Week begins in Paris.

What else we’re reading

Microsoft’s $10bn bet marks new era of AI The US software giant is considering a $10bn investment in OpenAI, the San Francisco-based developer of ChatGPT. If the company is right about the technology’s far-reaching implications, it could trigger a realignment in the AI world as other tech groups race to stake out their place in the new field.

How Apple tied its fortunes to China The company spent two decades and billions of dollars building a supply chain of unprecedented sophistication, with 95 per cent of iPhones, iPads, Macs and AirPods still being manufactured in China. This has created Apple’s biggest vulnerability: its dependence on a single country that has grown increasingly authoritarian and estranged from the west.

Philip Lane: ‘We haven’t seen “normal” in Europe for a long time’ The European Central Bank’s chief economist speaks with Martin Wolf about the institution’s response to global shocks, sustainable debt levels and a digital euro. “2022 was a year of a big pivot,” says Lane, “a big transition from accommodative towards restrictive policy.”

Opinion: There is no lasting path to Russian victory Putin’s war has left his country isolated in Europe, while permanent occupation of Ukraine is unfeasible, writes Gideon Rachman. Russia will only have a chance of rebuilding its moral, economic and international status if it ends the war.

Opinion: Is this the UK high street’s last stand? With a better than expected Christmas season, bricks-and-mortar retail has shown signs of a revival. But hailing the triumph of square footage over pixels would be wishful thinking, warns Helen Thomas.

Take a break from the news

Beaches, baths, spinning and spas — here are five feel-good destinations for 2023.