China This Week | Top military leader under investigation, China-Canada bonhomie, and population data

Canadian Prime Minister Mark Carney has also made headlines in recent days for his speech at the World Economic Forum (WEF) meeting in Davos, where he urged middle powers to collaborate amid a period of “great power rivalry”. He spoke of having concluded “new strategic partnerships with China and Qatar.” Days later, US President Donald Trump threatened “a 100% Tariff against all Canadian goods and products” if Canada made a deal with the US.

Finally, we put the latest stark numbers on China’s ongoing population decline in context.

Here is a closer look at these developments:

1. Carney, Canada and China

Carney visited Beijing from January 14 to 17. This was part of a recent thaw, given the various irritants in the relationship under former Canadian PM Justin Trudeau. Carney’s was the first Canadian PM’s visit in eight years.

These ranged from tariffs that the countries imposed on one another to Canada claiming that China was monitoring Chinese-origin Canadian residents and attempting to influence Canada’s local elections. Not too long ago, the countries declared each other’s envoys as persona non grata.

This time around, however, both parties agreed to settle “long-standing trade issues and establishing a track for major new investments”. In 2024, bilateral trade stood at $130.9 billion. Under the agreement, Canada intends to provide “an initial country-specific quota of 49,000 electric vehicles (EVs) per year at a most-favoured-nation tariff rate of 6.1%.” China, for its part, will lower tariffs on Canadian canola seeds.

However, Trump did not perceive these developments well. He said, “If Governor Carney thinks he is going to make Canada a ‘Drop Off Port’ for China to send goods and products into the United States, he is sorely mistaken,” echoing earlier statements on Canada being the “51st state” of the US. He added, “China will eat Canada alive, completely devour it, including the destruction of their businesses, social fabric, and general way of life.”

UPSHOT: There are clear reasons for Canada and China to turn towards each other. Carney has been among the few Western leaders to pointedly criticise the US under Trump and call for greater interdependence among “middle powers”. After Trump said that “Canada lives because of the United States,” he replied, “Canada thrives because of Canadian values.”

This is in line with China’s strategy of trade diversification post-tariffs, including in developing countries. But on a broader level, too, China has projected itself as a more mature and responsible country in comparison with the US. At Davos, Chinese Vice Premier He Lifeng (who also negotiated with the US on tariffs) spoke of Beijing acting “on the vision of a community with a shared future” and “upholding consensus and solidarity, and cooperation over division and confrontation.”

2. China’s demography woes

China’s Statistics Ministry released population data for 2025, which said the total population contracted over the year — a trend that has continued since 2022. The total number of births in 2025 was 7.92 million, marking a 17% reduction from 2024, while the number of total deaths rose to 11.31 million.

Given these trends, China has experimented with policies big and small to encourage births. Just last year, it introduced an annual nationwide subsidy of 3,600 yuan (about $500 or Rs 44,000), and removed condoms from a list of tax-exempt goods. However, the reasons for population decline are not just economic, or even limited to China, though its case may be stark.

UPSHOT: Fewer births in a society can place disproportionate pressure on the working population (15 to 59 years) to provide for the elderly, and result in a greater tax burden on the group at a broader level.

In China, the problem is exacerbated by the mandatory One-Child Policy (1979 to 2015). Children born in that era already have parents and two sets of grandparents as dependents. As The Guardian noted in a report, “Decades of a one-child policy mean that the current generation of adults who are at child-bearing age are socially conditioned to favour single-child households.”’

It is noteworthy that within a few decades, societal and public concerns have shifted from the spectre of overpopulation to declining populations and birth rates (number of births per 1,000 people in a population). Beyond China, too, these changes have been attributed to increasing acceptance of individualistic aspirations, economic factors, and women’s ability to make choices about having children.

Still, the scale of the decline, across a vast number of countries with varied cultures and economic conditions, and the limited (if not failed) results of policies incentivising child births, have invited deeper inspections into these trends.