China's Demographic Time Bomb
The Greatest Demographic Blunder in the History of the World
I have been warning of the perils of China’s one child per couple restriction for about ten years. The utter stupidity of this policy points up a short-sightedness on the part of the Chinese government of epic proportions. This is not just stupid, this is scary stupid. The Chinese government has not just shot themselves in the foot they have blown their foot off. According to a New York Times article of February 29, 2008 by Jim Yardley, it is estimated that China has managed to prevent roughly 400 million births in the last three decades. And as if that is not enough, culturally Chinese couples have overwhelmingly favored male children. I don’t even want to discuss gender driven abortions or what they did with the female infants that did come to term. I do thank God that some made their way to the U.S. and other countries through adoption.
But wait, let’s just think about this. China, the country on the fastest track in the world to economic development and modernization has carved out 400 million people from its population thirty years old and under. Moreover this anemic under thirty population is predominantly male. In the book “Bare Branches, The Security Implications of Asia’s Surplus Male Population” Valerie M. Hudson and Andrea M. Den Boer point out that high male to female ratios often trigger domestic and international violence. Duh! Who are they supposed to marry? “Bare Branches” is dead on. It gets worse. According to the Times article: “China’s fertility rate is now extremely low, and the population is rapidly aging, especially in urban areas. Experts have warned that China is steadily moving toward a demographic crisis with too many old people in need of expensive services and too few young workers paying taxes to meet those bills.” There is more. China’s single biggest economic advantage is cheap labor, nearly at the slave level. However according to the Times article “China’s biggest manufacturing centers are already facing labor shortages.” A labor shortage means higher wages. Higher wages mean the loss of China’s competitive edge, their only competitive edge. China is a country that has sealed its own economic doom. We need to watch the attractiveness of higher price Chinese goods as labor costs escalate along with higher shipping costs because of higher oil prices. China’s economy is headed south. So, what is the world going to do with a country of 1.3 billion people when they get hungry?
What is the answer here? I don’t think there is one. I think we just wait until the demographic time bomb explodes. The world is going to be an interesting place.
Kenneth W. Gronbach
9 Comments
Reader Comments (9)
I suspect that China will implement some sort of euthanasia program for the excess elderly that involves harvesting human organs for the international market. Such a program would turn their elderly from being a economic loss to economic profit. As China already harvests organs from prisoners, it only a slight adjustment on the morality scale for their leadership and culture.
I have been giving this issue some additional thought. I wonder if China's leadership feared a revolution and this fear is what actually precipitated the one child policy. No young men- no revolution.
I believe as you do, China has no moral compass. They appear to be incredibly selfish and short sighted. There is NO way to recover from thirty years of stupidity and a 400 million deficit in their demography. Even if they wanted to reverse the process they can't because they have cleverly eliminated the potential parents. No parents, no kids. We have witnessed the beginning of the end of China.
Ken
You should know that the Chinese never got to fully occupy their labor force and unemployment is rampant nowadays, check this article, Where will all the students go? Apr 8th 2009 from The Economist It starts by telling that this year, 6 millions new college students are graduating and job searching and facing severe conditions because USA no longer buys as much, and this situation should stay for another decade. This will push salaries down in the long term in China and now that the Y‘s are reaching their working age I can see a global plunge of salaries. Overpopulation is still a problem. Now imagine another 400 millions people! They have already flooded the whole world with so much junk and pollution, imagine with another 400 millions had they not stop their birth rates.
But yes, the implosion Ken address will eventually come and it may not have to be that bad when robots may be ready to take care of the elderly. Take a look at Robotic Nation web site by Marshall Brain, but in the unusual event that the robot cannot take charge, I’m afraid that policies like mass murder will happen. All living beings have always capable of quite gross actions under heavy pressure and Americans are not the exception, as bleeding hearts as we pretend to be. Don’t let your wealth blind you.
Ken, do you really have any idea what you're talking about here? I've worked for 6 years in China (and Singapore) and speak the language there, and while yes they have some problems that need correction, you have no clue how things actually work there.
First of all, there's no "birth dearth" in China. Just because there's a 'one child policy" in China doesn't mean everybody has one child-- it was something introduced to stabilize population as much as possible, but it largely doesn't apply to most of the rural population, and has less application in the west of the country and to countless subgroups.
When you tally up the numbers, in fact (and take into account underestimates, as professional demographers have)-- China's fertility rate is about 2.2, i.e. close to replacement. They're not going to be losing their manufacturing edge.
Your cardinal sin, though, is that you pay so much attention to quantity, as many demographers do, while ignoring the quality issue-- quality in terms of education, infrastructure and other issues. You can't just pull out a lame Econ 101 calculation, claim that "more people = more demand" and assume this leads to a better economy. In fact, under many circumstances a growing population can be a disaster for an economy.
A higher population is a gain only if that population is educated, and has sufficient infrastructure to sustain its needs. Without these things, a higher population competes over a shrinking pool of resources, leading to tensions, higher pollution, poorer health and therefore an ultimate net decrease in economic potential.
This is why. e.g., African countries (with by far the world's highest population growth) also have the worst economic performance, and GDP per capita is abysmal-- they don't have the resources to fully sustain that population, provide health and education, and so instead, they get tension and conflict, which destabilizes the country and pushes down GDP and employment. Africa has great potential, but it can realize it only with a sustainable population that it can then harness.
India, though it's a place I love to go to overall and has had reasonable growth lately, is hampered by the lack of infrastructure and education in their big cities. So long as India's growth outstrips the support networks, economic growth ill also be hampered.
This is what's hitting the USA as well. We don't have the educational resources or the medical system to support a rapidly-growing population like this, and we're no longer self-sufficient-- we have to import our oil and natural resources, which results in our transferring our wealth overseas. IOW, our own net population growth is proving to be a drain b/c it's outstripping our resources. Too many demographers, like yourself I'm afraid, fail to grasp this basic facet of economics.