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China's ageing population threatens key Beijing policy goals for the coming decade of boosting domestic consumption and reining in ballooning debt, posing a severe challenge to the economy's long-term growth prospects.

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"China's age structure change will slow down economic growth," said Xiujian Peng,  senior research fellow at the Centre of Policy Studies (CoPS) at Victoria University in Melbourne.

In the next 10 years, about 300 million people currently aged 50 to 60 - China's largest demographic group, equivalent to almost the entire US population - are set to leave the workforce at a time when pension budgets are already stretched.

The state-run Chinese Academy of Sciences sees the pension system running out of money by 2035, with about a third of the country's provincial-level jurisdictions running pension budget deficits, according to finance ministry data.

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Chinese society has traditionally expected children to support their parents financially as they age and often by living together to care for them.

But as in many Western countries, rapid urbanisation has shifted young people to bigger cities and away from their parents, prompting a rising number of seniors to rely on self care or government payments.

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INNOVATION WOES

China saw a rise in births after ditching the one-child policy but the recovery was far off pre-implementation levels and also short-lived. Fewer children were born in each of the past eight years, including 2023.

Demographers say the number of children in any economy is directly correlated with domestic consumption.