This study investigates the economic impact of population agglomeration in China, with a focus on the role of population size and density in economic efficiency. Utilising a newly constructed panel dataset and employing Two-way Fixed Effect and Generalized Method of Moments methodologies, the study finds that population density significantly enhances economic efficiency, while the impact of population size is less pronounced. The study reveals regional disparities in the benefits of agglomeration, with Central and Eastern China benefiting more than the Western and Northeastern regions. These findings suggest a need to reconsider inter-regional migration policies and advocate for the promotion of intra-region population agglomeration.