Of course this is the
shoe that is yet to truly drop. China
has only just completed the conversion over to an industrialized economy in
which the last surplus cohort made its way into the city from the last village. It is now all about efficiency and improving
pay packets for the workers as well as appropriate mortgage products on
affordable housing.
The population itself
is likely to significantly subside from present levels as the death rate over
rides the present birth rate by a significant extent as the generations of the
one child policy begin to age out. I
would like to see a proper statistical analysis of the expected Chinese
population over the next fifty years that convincingly deals with this. Government sources have just too much
incentive to lie.
Recall that we did not
understand the population costs of Stalin’s 1930’s agrarian policies until
communism itself fell. I do however,
believe them when they admit that they have run out of cheap labor to exploit.
Aging Population Could
Trim 3% Off China GDP Growth
October
23, 2013, 2:25 PM
China’s
one-child policy has hastened such a big slowdown in China’s working-age
population that the country’s demographic future is starting to look a lot more
like that of rich nations—and that’s bad news for China.
According
to two Citigroup economists, Nathan Sheets and Robert A. Sockin, China’s
“deteriorating demographics” are likely to trim 3.25 percentage points off
China’s annual growth rate between 2012 and 2030, compared to its double-digit
growth of past decades. While industrialized nations face similar demographic
challenges, they have a deeper cushion of wealth to rely upon (witness Japan.)
China needs to continue to grow rapidly if it’s ever to reach the fat-and-happy
stage.
“The
potential difficulties as Chinese policymakers seek to pilot their economy
through this demographic transition represents
an under-appreciated global risk,” the two economists write in a recent
report.
For
the past 20 years, China’s working age population has risen, which has helped
boost productivity and incomes, as many young people left the rural areas,
where they worked with basic tools, and signed up for factory work on China’s
southern and eastern coast. That was the economic-plus of the one-child policy.
“The share of the young was diminished and, being a developing country, the
number of people over 65 years old was low as well ,” the economists write. As
a result, those of working age had fewer responsibilities to care for little
kids or aged parents.
Now,
that’s reversing. The share of the working-age
population (ages 15-64) will decline in China between 2010 and 2030 nearly as
fast as it will in Japan, the U.S. and other wealthy nations. Switching to a
two-child policy could even make things worse over the next 20 year, because
more births would mean that working parents would have more dependents to care
for, the economists note.
Overall,
Messrs. Sheets and Sockin estimate that China’s growth ceiling over the coming
two decades is 6.9% annually, “and to the extent that urbanization,
industrialization and convergence dynamics play through (as is likely) actual
growth will be substantially lower.”
Of
course, there are measures China could take to ease the problem, the economists
say: Have people work longer and use more automation.
Immigration
could possibly help, though that’s a solution usually proposed for rich
nations. And where might migrants come from? Africa’s population is still
growing sharply.
“We
see Africa’s voice in global deliberations as likely to be increasingly
important,” the Citigroup economists write. “We also expect that Africa will
account of a rising share of global immigration flows.”
–
Bob Davis
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