Honestly, China shouldn't be worried about demographics because robotics + AGI will make almost all human labor redundant within a decade, maximum two, and China's current workforce is sufficient to get it across the finish line + deter the US from trying to do some sort of first strike.
I don't know if that is what the Chinese leadership is thinking (it's probably not), but they're making the correct decision to not panic about demography.
What Chinese leadership is thinking is very simple, because it's the same thing anyone with more than two brain cells is thinking:
1. Demographics is one among many factors feeding into growth. Starving illiterate peasants with no equipment stuck in rural backwaters are not economically valuable just because they happen to be young. Nutrition, education, capex, housing, infrastructure, technology, all of these other factors which are much easier to address take precedence because China—like literally every other country in the world—is absolutely nowhere close to maxing out the economic potential of every worker it already has. So much wasted human capital in every sector.
2. A large population is absolutely a double-edged sword. People consume resources, both physically and in terms of governance capacity, neither of which is infinite. Quite the opposite, in fact. People, if well-led, can produce plenty of resources. But they always consume resources, no matter how well or poorly their leaders make use of them. And no leader, however perfect, can micromanage the entire national economy so there are always going to be subpar mediocre fools handling a lot of the day-to-day stuff. That's how too large of a population can easily become a curse instead of a blessing. Maybe you can see how it might very well be a good thing to have a controlled, emphasis on
controlled, decline of the total population size.
3. Birthrates are inherently difficult to manage due to their universal and personal stakes, and pushing them one way or another (as OCP attested to) consumes a lot of those aforementioned physical and political resources. Is it really the best use of finite resources to embark on radical social engineering campaigns? Or maybe those resources are better spent on easier solutions to the same problem. Which is not fewer people, but less growth. There is a difference. Some factors are always pulling growth down, others are pushing it up, and all of those factors are constantly changing in type and magnitude. The trick to good leadership is to make sure the latter keeps outweighing the former in the net aggregate, and so far, Chinese leadership these past few decades has an excellent record in that department.
In any case, this is a stupid conversation through and through because it always degenerates into reductionist hyperbole. Fortunately, the leadership is not so stupid as to heed such nonsense.