China's Demographic Time Bomb Is Here
It has been a while since I wrote about this but the state media agency came out this week discussing the issue so it is worth mentioning.
China has started to see its demographic implosion. Things do not look good for the country long term. We are now at a point where the population is already in decline. Reports are that India surpassed China as the most populous nation. The population of the latter feel by 850K in 2022.
So what prompted the state media agency to comment. The fact that many are stating that India passed China in people along with the tough economic conditions has people on edge. Most feel that this country is the fastest aging in history.
This prompted the statement that the state believes the births will be around 8.5M-9M this year. It was meant to debunk the studies claiming they will be around 8 million.
The problem with this is that it is still a step back from where it was. Here is the number of births in China.
As we can see, in 2022 the total was 9.56 million births. This was the number that led to a decline of 850K in population. What will happen if they are down another half million to a million?
It is possible that China could see a loss of 1.5M-2M people in 2023 due to an increasing death coupled with lower birth rates.
Economic Catastrophe?
Could China be in for an economic catastrophe? Many are still highly optimistic about the country. There are a lot of reasons for this. However, if demographics are destiny, this is not going to end well.
Many feel that losing under a million, net, when there are 1.4 billion people is not a big deal. The above chart shows a massive drop off in births yet that could be brushed away. Or can it?
Here is a chart that goes back further.
The 16M and 17M figures were serious reductions from the past. What we have is a demographic tree that is skewing higher, i.e. older populations.
Here is what it looks.
Wikipedia
What all this means is a bad situation is getting worse. Look at how skinny the bottom of the tree is. Now it is likely to contract even more.
Here is what many fear will happen come under 30 years. Keep in mind that it is easy to project out once women leave childbearing age.
This is another Japanese style economic collapse, but on steroids. How do you support all those people with a smaller population base in the working age? This is a situation that has not been answered.
China Screwed?
The simple truth is that China might be screwed (pun intended).
It is a country with a historically low birthrate. The percentage of child bearing women compared to men is low. This means that many males will go childless. Here we see where the issue only gets worse.
Unfortunately, as each new generation appears, it is smaller than the last. This means that an already reduced number of babies each year is further reduced as the number of women who can get pregnant declines.
This is exactly what China facts. All of this means that, economically, it could take a huge step backwards. The numbers coming from this country are always suspect. That means that the growth they are claiming could be far lower.
And that would not set up well considering the demographics going forward.
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What will happen to all the dirt cheap labor? Less toys, less junk to be mass produced. I wonder who will pick up the slack from what China ends up failing. Automation? I’m not sure it will be able to keep pace.
Technology can help to keep productivity up. However, there is no advantage for China if other companies automate also.
Also, the cheap labor in China is a myth these days. They had a 15x increase since 2000. That is why countries like Vietnam are getitng more factories.
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As bad as Japan’s demographics are, at least they’ve had decades to prepare for the dearth of young workers. Much of their manufacturing has been moved out of the home islands to the countries where those items are purchased. Toyota, Honda, Nissan, and Subaru all now manufacture in the U.S.
If China wants to copy that model, they don’t have much time.
Japan also moved a great deal of their manufacturing out of China. They are really buliding in Vietnam. 15 years ago, Kyocera opened up factories for their goods in Vietnam.
As for the preparation, demographics do not sneak up. The CCP chose to ignore the problem.
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About to be some drastic changes in terms of retirement there that's for sure. I often wonder how bad off we are though as well with SS seems like that's constantly under fire but mainly the abuse from the government using it for other things it shouldn't be used for.
As long as you can sell your debt, you are fine.
Long term, the US is going to have issue but everyone else will first. China will have a major issue but it might pale in comparison to the EU. Some of those countries made insane promises. I am not sure the Chinese system has a retirement package that is rosy.
The EU cannot sell its debt now. It is all going on their banks balance sheets as NY banks wont touch it (I am sure it is the same in Tokyo and Australia).
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China has faced twenty years of incredible growth, in my opinion it could now be normal for it to have a few years of difficulty. moreover, it seems to me that the Chinese government has understood that there are difficult years ahead of it. In fact, it seeks to do more and more trade with the Chinese currency
Hard to do more trade with that currency when the largest trading partner is the United States. That means US trade.
And you are looking at commerce. Financial transactions are overwhelmingly USD.
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Hmm
All I can see here is that the birth rate of China is reducing and they are still the most populated country in the world
That is incredible