The country's National Bureau of Statistics has reported the population fell to 1.4 billion in 2022 with a decline of roughly 850,000 people.
Hong-Kong based economist, Janu Chan, outlined some of the key reasons for this sudden decline.
"China's falling population growth has been a long-running issue. It's a legacy of the one child policy which was in place for many decades and finishing in 2016. But it's also some social and economic factors. If you ask many Chinese people they will tell you it's really expensive to raise a kid and that's also adding to the declining birth rate. It's not good for long-term economic growth prospects. It means the potential growth rate of the economy will be lower. It adds to that argument that the very strong growth rates of the economy in the past is going to be hard to repeat."
The one child policy beginning in 1980 was an initiative by then leader Deng Xiaoping to address rapid population growth.
Enforced by the National Health and Family Planning Commission, the government had the right to issue signficant fines to parents for violating these rules and often forced mothers to have an abortion.
However, in an attempt to cope with an ageing population and shrinking workforce China changed to a two-child policy in 2016 then a three-child policy in 2021.
Experts believe that these earlier discouragements paired with a current lack of affordable childcare and rising cost of living has seen many parents second guessing parenthood.
Kang Yi, the head of China's National Bureau of Statistics, says despite this poor performance and the population decline, the Chinese government is optimistic about future economic prospects.
MANDARIN TRANSLATED TO ENGLISH: "The national economy is resisting the pressure and continuing to develop with total economic volume reaching a new level."
Mathan Somasundaram, C-E-O of Deep Data Analytics, says the Australian economy is likely to feel the pressures of the projected economic downturn in China.
