Wednesday, January 30, 2013

China Working Population Decreasing

Demographics is destiny, it is something that I believe is true, and have used one of the many reasons why China will not be the next super power. Their demographic outlook is poor, and no society ever thrived while in demographic decline.  Essentially a lot of analysts have summarized China's situation as 'they will get old before they get rich.'  This is a known problem in China, but like all governments, their own has failed to even try and mend the situation. But there maybe a reason why, they may have already gone over the edge.

According to the Chinese National Bureau of Statistics, via Gordon Chang at Forbes, announced that 2012 saw a decline in the working age population from 2011 to 2012. And some demographers have postulated that 2010 was the year of peak employment numbers for China.  This is not good, as it essentially means China has gone over the event horizon.  While China had expected their peak population age to peak, it wasn't supposed to do so for another four years.  The fact that it has happened earlier raises another specter. 

It is estimated that China's population will start declining in absolute numbers around 2030, however, if peak employment as occurred before expected, then this means that peak population might occur sooner than anticipated. In fact, according to Gordon, some Chinese officials now expect the population peak to occur in 2020, fully 10 years before the official estimates.

The threat of a top heavy population distribution curve is well articulated in the United States, it is one of the reasons why we have unfunded liabilities around $ 80 trillion, but as bad as that is for America, Europe and Japan, wealthy industrialized nations, this is even worse for China. China, based off of 2011 statistics a per capita of just under $5,000, making it 114th according to the world Bank. Argentina, which just barely squeaks by into the highly developed category, had an income of just under $ 11,000 in 2011. And for nations that have traditionally been considered '1st world', Britain, with an HDI of .86 has an income per capital of over $ 38,000 in 2011.

To just reach the level Argentina is at now, China would have to double their income in the next 10 years.  While China has experienced tremendous income growth over the last decade, it becomes harder to have exponential gains as time goes on, and given the global economic outlook. It would be very difficult for China to repeat its feat. Adding in China's real estate/infrastructure/government money bubble, and the outlook isn't good.

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Seattle resident whose real name is Kevin Daniels. This blog covers the following topics, libertarian philosophy, realpolitik, western culture, history and the pursuit of truth from the perspective of a libertarian traditionalist.