We can now discern more or less when the catch-up growth miracle will sputter out. Another seven years or so – enough to bouy global coal, crude, and copper prices for a while – but then it will all be over. China’s demographic dividend will be exhausted. Beijing revealed last week that the country’s working age population has already begun to shrink, sooner than expected. It will soon go into “precipitous decline”, according to the International Monetary Fund.
Japan hit this inflexion point fourteen years ago, but by then it was already rich, with $3 trillion of net savings overseas. China has hit the wall a quarter century earlier in its development path.
…[T]he reserve army of peasants looking for work peaked in 2010 at around 150 million. The numbers are now collapsing.
The surplus will disappear soon after 2020. A decade after that China will face a labour shortage of almost 140m workers, surely the greatest jobs crunch ever seen. “This will have far-reaching implications for both China and the rest of the world,” said the IMF.
I wonder if we’ll feel more the lack of $15 winter coats or the iPhones.
There is little Beijing can do to head off the shock. The effects of low fertility rates – and the one child policy – are already baked into the pie. It would take half a century to turn around the demographic supertanker.
Read the whole thing. There’s lots more in the rest of it.
Anyway, turns out a Google search for “China will get old before it gets rich” turns up 34 million hits, but on my site I find this post, from 2007 (quoting Mark Steyn, then myself): China – Adoption
My line on China, the soi-disant colossus of the 21st century, is that it’s been dramatically oversold. China will get old before it gets rich, in part because of its foolish “one-child” policy.
So, we already know that they have no problem sweeping hundreds of thousands of people out of their homes to make way for a glassy swimming pool, so isn’t it entirely possible that rather than bankrupting themselves and undoing all their Glorious Revolutionising by taking care of a billion elderly, they’ll just let them starve to death? Maybe the trend among American do-gooders in the future will be adopting Chinese grandparents?
Which brings us to a bit I skipped in the ellipsis in the Telegraph article:
It is already six years since a Chinese demographer shocked Davos with a warning that his country might have to resort to mass suicide in the end, shoving pensioners onto the ice.