Taps Coogan – May 31st, 2022
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While the CCP is unlikely to recognize that China’s population is shrinking anytime soon due to political concerns, the prestigious Shanghai Academy of Social Sciences is forecasting that the population is on track to start shrinking this year.
China’s National Bureau of Statistics reported that China’s population grew by just 480,000 last year. That compares to eight million or so just a decade ago.
China’s fertility rate slipped to just 1.15 in 2021, down from 1.3 in 2020. That compares to 1.6 in the US and 1.3 in Japan, a country that is famous for is fast-shrinking population. Keep in mind that the US has a large net immigration rate that bolsters population growth despite a below-replacement fertility rate (a fertility rate of 2.1 is needed to keep the birth/death ratio neutral). China has the opposite problem.
Both Chinese officials and the UN were forecasting that China’s population wouldn’t peak until 2029 at the earliest, but private forecasts not built on the CCP’s politically motivated data have been calling for a peak much earlier. Covid and the recession in-all-but-name that China has been enduring this year appear to have dramatically suppressed births for the last couple of years, pulling forward the ‘peak’ date to right now.
As we have previously noted, while China’s working-age population has already peaked, according to the Shanghai Academy of Social Sciences, China’s population of retirees will be larger than its entire working-age population by around 2080.
For the economic implications of a shrinking workforce and aging population, see Japan. After decades of world-beating growth in the mid-20th century, growth that brought Japan as close to overtaking the US economy in the 1980s as China is today, Japan hit a demographic wall in the late 1990s and has seen near zero growth ever since.
China, unlike Japan which made the transition to a high-income country before its demographics peaked, is still far away from high-income status and has hundreds of millions of people still living on dollars a day.
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It’s hard to see how China will be able to transition to a high-income country when: 1). The one-child policy gutted their population of 20 and 30-somethings beginning a decade ago; 2). Those 20 and 30-somethings aren’t getting married because of skyrocketing cost of living in the cities, caring for parents/grandparents, and a male/female ratio of 115:100 caused by sex-selective abortion encouraged by said 1-CP; 3.) Unlike the West, single-motherhood is deeply frowned upon; 4.) Social services are under-developed, necessitating a high savings rate; 5) You can’t create a consumer-driven economy without this demographic because 6) most consumption is driven… Read more »
7.) The smart people you need to create the innovative companies and products that drive a high income economy like living in countries with the actual internet, where they are allowed to have actual opinions about things, not a paranoid authoritarian dystopia without political representation or any chance or reform
That’s debatable. Just because you are creative/innovative doesn’t mean you care about politics. Jack Ma was only put down after he mouthed off about the Party (granted, they were probably looking for an excuse to muzzle him). Having a conscience is not prerequisite to being an entrepreneur. If a technology dovetails with political objectives, tyrants are happy to encourage it. The Nazis and Werner von Braun for example. Also, new technologies aren’t necessarily conducive to democracy. We see this in the US with our battles w. Facebook & others over privacy, and China’s skill in AI has helped them create… Read more »