Analysis of the Long-Term Impact of Sustained Decline in China's Birth Rate on Consumer Industry Investments

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China’s population issue has entered a

, a trend that will fundamentally reshape the investment logic of the consumer industry.

Indicator	Current Status and Trend	Investment Implication
Total Fertility Rate	Approx. 1.0-1.3 (below the replacement level of 2.1)	Long-term contraction of labor supply
Population Peak	Inflection point emerged in 2022, officially entering negative growth	Total consumption scale tends to contract
Dependency Ratio	Elderly dependency ratio rising rapidly, child dependency ratio declining	Consumption structure shifting toward the elderly group
Urbanization Rate	Approx. 65%-67%, growth rate slowing down	Sources of new consumer demand narrowing

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Sub-sector	Impact Mechanism	Investment Rating
Infant Formula Milk Powder	Target population (0-3 years old) scale continuing to shrink	🟠 Under-weight
Children’s Clothing/Toys	Consumer base declining	🟠 Under-weight

• The number of births in 2024 is approximately 9-9.5 million, a decrease of over 40% compared to the peak of the ‘two-child policy’ in 2016
• The industry growth logic is shifting from
  penetration rate improvement
  to
  stock competition

Sub-sector	Impact Mechanism	Investment Rating
Education Services	Short-term contraction of early childhood education, but demand for vocational education and lifelong learning is rising	🟡 Wait-and-see/Selective Picks
Fast-Moving Consumer Goods (FMCG)	Shrinking household size and the rise of the single economy drive demand for small-packaged and premium products	🟢 Focus on Upgrading
Maternal and Child Retail	Consumption amount structurally increasing with higher investment per child	🟡 Select Leading Enterprises

Sub-sector	Logical Support	Investment Rating
Healthcare	The elderly population (aged 60+) is projected to exceed 400 million by 2035, driving rigid growth in medical expenditure	🟢 Over-weight
Elderly Care Services	Rapid release of demand for institutional and community elderly care, with increased policy support	🟢 Over-weight
Health Supplements	Increased health awareness among middle-aged and elderly groups, driving growth in demand for functional foods	🟢 Focus
Pet Economy	Emotional substitution effect, growing single-person population drives ‘anthropomorphic’ consumption	🟢 Selective Picks

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• Negative population growth → possible decline in savings rate, moderate recovery in the proportion of consumption in GDP
• However:
  Per capita consumption growth is constrained by income growth and consumer willingness
• Investments should focus on
  per capita consumption growth
  rather than
  consumer population expansion

Consumption Population Structure Change Trend Schematic:

2024: Youth (18-35 years old) ≈35% | Middle-aged (36-59 years old) ≈50% | Elderly (60+ years old) ≈15%
2035: Youth (18-35 years old) ≈28% | Middle-aged (36-59 years old) ≈48% | Elderly (60+ years old) ≈24%

• Total volume of consumption scenarios for young people (trendy apparel, social entertainment) is contracting; focus on upgraded segments
• Middle-aged consumption (quality household consumption, insurance and wealth management) remains the main core market
• Elderly consumption (healthcare, wellness, tourism, cultural entertainment) becomes a source of increment

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Strategy Dimension	Recommended Allocation Direction
Over-weight	Healthcare (innovative drugs, medical devices, pharmacies), elderly care industry chain, pet economy
Equal-weight	Mass consumer goods (select leading enterprises with expanding market share), premium baijiu (structural consumption)
Under-weight/Avoid	Traditional infant consumption (milk powder, children’s clothing), mass children’s education

Screening Dimension	Specific Indicators
Track Priority	Market scale growth rate > industry beta; focus on penetration rate improvement logic
Competitive Landscape	Prefer leading enterprises in industries with stable structure and concentrated market share
Growth Quality	Focus on endogenous growth (product upgrading, channel deepening) rather than external mergers and acquisitions
Valuation Considerations	Avoid sectors overpriced due to ‘population anxiety’ (e.g., infant-related concepts)

• Policy Risk:
  Pro-natal policies may be introduced beyond expectations, affecting short-term expectations
• Economic Cycle Risk:
  Overall consumption capacity is affected by economic growth, and population factors are long-term slow variables
• Valuation Risk:
  Popular tracks (e.g., elderly care) may have already partially priced in long-term logic

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A decline in birth rate is not a

, but an .

Traditional Perspective	Correct Understanding
Decline in consumer population → overall consumption contraction	Decline in consumer population but growth in per capita consumption, with volume and price rising in some sectors
Disappearance of demographic dividend → decline in investment value	Talent dividend, consumption upgrading, and service industry development bring new opportunities
Pressure from a single dimension	Should distinguish between ‘volume logic’ and ‘quality logic’ to seize structural opportunities

• Total volume thinking → structural thinking
  : Shift from ‘consumption by 1.4 billion people’ to ‘consumption by 1 billion people more willing to spend’
• Increment logic → stock logic
  : Focus on market share expansion and product structure upgrading
• Age anxiety → life cycle perspective
  : Grasp the evolution of consumption demand throughout the life cycle

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[1] National Bureau of Statistics of China - China Population Statistics (2022-2024)

[2] UN Department of Economic and Social Affairs, Population Division - World Population Prospects 2022 (China Population Projections)

[3] China Development Research Foundation - Research Reports on Population and Economic Transformation

[4] Securities Research Institutions - Special Research on Population Structure in the Consumer Industry (2023-2025)

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For further in-depth analysis (e.g., valuation of specific listed companies, data on segmented tracks), you can enable the to obtain more detailed quantitative analysis of the A-share consumer sector.