The way to go hasn't been spamming useless mouths to feed since a long time already. Africa is populous. India is populous. Where did that get those places?
As I see it, the future of position China is not as an unitary nation by itself, but a network of nations with current China as its political, industrial and scientific center. China can go down to 1 billion population by the end of the century, or even 800 million. That means less elderly to take care of, and a ripe societal environment with plenty of room for a new baby boom, as population groups are cyclical in nature.
But then who will keep alive the industries? Technology will. China did not acquire a strong industry by having a large manual labor population, it got a strong industry because it had a large educated population that could make innovations in efficiency, and the large population market to test out said inventions on. Even as China's demographics are slowing, industrial expansion isn't slowing. These 2 factors are nearly decoupled.
Who will do the consuming? The countries in China's orbit will.
Who will make sure we stay ahead in science? China still have many less educated people from the interior, and once those run out, immigrants will.
The British Empire were once an island of maybe 60 million, that controlled India, vast swathes of Africa, and successfully became world hegemon for a century. I'm not saying China can decrease to 60 million, because British fell to shit for a reason. But 800 million of well educated people in the most advanced industrial economy in the world can realistically govern and be the industrial center for the rest 7 billion.
Hence the government does not fear the issue of decreasing population, rather, if it is correctly done, it will reduce burden caused by overpopulation at a later date.
China just needs to make sure to reach out and pull in as many countries as possible.