7 ms·

China appears to have a massive demographics problem on their horizon, largely self-inflicted.

jpgvm 4y ago
That is certainly true but they also seem willing to go much further than any country has before in an attempt to reverse their population growth decline.
- nuclearnice3 4y ago
  what measures have they taken?
  - jpgvm 4y ago
    The biggest one has been deflating their property bubble. It still remains woefully unaffordable but they have stalled the relentless rise in housing costs and have started to even bring them down in some cities. Their "housing is for living, not speculation" policy along with 3 red lines and directives to deleverage developer firms are all taking effect. They banned for-profit tutoring to bring down the cost of raising children (but also ensure children have time to be children). These services are now offered by or in-cooperation with the state school system and no-longer teach the same subjects as are taught during normal school hours. i.e they basically converted it into educational after-school day-care that is strictly non-profit. 1 child policy was replaced by 2 child policy, then 3 and finally abolished. Ironically this was only ever applied to Han Chinese, minorities like Ughyrs have always had uncapped family sizes (another massively misunderstood fact about China but getting into it would just lead to downvote brigade by people that have never even been to China). So yeah the plan is to reduce cost of living, drive down costs of having children in particular, allow people to have as many children as they want and soon I imagine we will see direct incentives to have children.
    - seibelj 4y ago
      Private tutoring will always be available to the rich. The various bans on personal freedom will keep life mediocre and ambitions small for the majority. China won’t reverse anything and their authoritarian nature will (as always) lead to ruin.
      - pm90 4y ago
        Authoritarianism doesn’t always lead to ruin. It does have negative effects (stifling innovation, increasing likelihood of disastrous civil wars and revolutions etc.) but its not a given. With China, we’ve seen it go both ways: Disaster under Mao and revitalization under Deng Xiaoping. What will leadership under Xi look like? Remains to be seen.
        mr90210 4y ago
        Have you lived in an authoritarian country?
        FredPret 4y ago
        Deng did well because he unclenched a little
        pm90 4y ago
        Yes he did. I don't know very much about him yet, but his life seems to be a fascinating one of gently guiding a failing state (that failed on epic proportions) back into normalcy and then into rapid growth.
      - chiefalchemist 4y ago
        If you compared China minus 50 years with China of today then ruin doesn't look so bad. Take away The West's (citizens) bailing out their financial markets (circa 2007 / 08) and again authoritarian ruin doesn't look so bad. I'm not stumping for China or authoritarianism; only pointing out that it's early days and there's more to that picture than brash big brush judgements.
      - alexashka 4y ago
    - wnolens 4y ago
      That's so interesting. I like all of those ideas in theory. Housing for living not profit, equality of opportunity for children, population at replacement (2 per couple) no more. I guess it really takes an authoritarian gov forcing it for those principles to be lived. North American politicians claim to be about some of these things, but it's structurally impossible in a free society.
    - bko 4y ago
      > Ironically this was only ever applied to Han Chinese, minorities like Ughyrs have always had uncapped family sizes (another massively misunderstood fact about China but getting into it would just lead to downvote brigade by people that have never even been to China). I'm from the west and I've never heard a defense or Chinese perspective. I understand that a lot of media we consume in the US is biased, especially on domestic issues abroad. Can you provide a link that explains the misunderstanding?
    - sleightofmind 4y ago
      I have a simple metric for judging the housing market (well, existing, single-family homes, anyway). I open Zillow, sort homes from Low Price to High Price, and count the number of price cut notifications on each page of 40-homes. I also exclude houses built in 2022. In Inland Southern California, very close to 25-percent of the homes have significant price cuts. Something similar seems to be happening in a few other places I'm interested in. Two months ago, in the community I live in, there were zero homes with a price cut notification on their listing. Now it's 25-percent plus. Yeah, my method is not sophisticated, but then neither am I. It is, however, up to date. I ignore prognosticating real estate experts... always.
- spaceman_2020 4y ago
  Still not convinced any measure can change the direction unless capitalism and the experiences and lifestyles it enables are killed completely. No amount of incentives have managed to push fertility rate above replacement level in any country as far as I can remember. The data from countries like India also shows that as soon as any region experiences even moderate prosperity, birth rates drop like a rock. Heck, India’s fertility rate is now below replacement level and it happened waaay ahead of schedule.
- deleted 4y ago
  [deleted]
puranjay 4y ago
Zeihan has the same thesis, plus insurmountable geographical challenges. Really hard to root for a country that now has a population rhomboid instead of a population pyramid. Soon to turn into an inverse pyramid aka a reverse ponzi where the old work to keep the few young alive.
eej71 4y ago
Agreed. Scott Rozelle's _Invisible China_ is very much worth a read on this topic. The author is not a China hater - far from it. But he lays out in sobering detail the substantial demographic challenge they still face and why they may not escape what is known as at the middle income trap. If anything, I came away with the understanding that while many fear a rising China, it is a China that stumbles that can be more worrisome.
- dirtyid 4y ago
  Even conservative GDP and growth estimates will put PRC in high income within a few years. Official 2021 per capita figures is $100 away, so theoretically reachable at end of year even with stymied covid growth projections. That said middle income trap is overstated to the point that it may not exist, including by OG researcher who coined the term. TLDR is middle income countries with successful industrial structure still generally grows significantly better than developed economies. As for Rozelle, he does good work. But reality is even with deficient interior education infra, PRC is still massively overproducing talent after massive brain drain. There's record youth unemployment, again some of which is covid driven, but talent oversupply was evident pre-covid. The demographic crisis is going to be difficult to negotiate, but ultimately PRC has too manypeople, specifically undereducated older cohorts that can't be integrated into modern economy. Whatever happens PRC will be better off with 1B people than 1.4B, simply too many mouths to feed. Meanwhile there's plenty of talent to go around to build comprehensive power which more than GDP undergirds national strength. Xi/CCP's vison for "moderately prosperous society" was $10000 per capita, leadership knows PRC has too many people to reach developing country incomes. The current pipe "China dream" is $40000 per capita by 2049 (100 year anniversary) probably not realistic but still a lot of overhead to improve productivity. Likely enough to establish PRC as geopolitical superpower even with at low high income level. At end of the day, a populous country with $20000 GDP and 20 aircraft carriers is still much more powerful than a small country with $100000 GDP and none.
  - iabacu 4y ago
    One thing that you overlook is something that even Xi points out as an issue: right now, China needs more quality than quantity. For example, in semiconductors, Taiwan, with a much smaller population (and arriving late in the game) beat the US, Japan and Korea. China, with 600k STEM graduates per year, is still trying to catch up. On covid vaccines, even Russia has their own vaccine that reach mRNA levels of protection, but China is still stuck with the Covid Zero policy. Quantity was definitively an asset for Chinese growth based on cheap labor. That source of growth is almost running dry (to the point where they are resorting to labor camps). But at some point, quantity becomes more of a liability.
dirtyid 4y ago
Self inflicted moderate demographics problems to delay a massive one. Without family planning, PRC would be at 1.7B people. Currently at 1.4B more than 600M are, to be blunt, excess people - underedcuated cohorts that subsists in informal economy that can't be integrated into modern consumption economy. PRC would be tackling a much grimmer demographic bomb if it were not for restricting births.
UmbertoNoEco 4y ago
And what would be that problem? That sounds like wishful thinking. The median age of China is below of that both the US and the EU. https://en.wikipedia.org/wiki/List_of_countries_by_median_age https://en.wikipedia.org/wiki/List_of_countries_by_median_ag... A significant fraction of the US seems to have problem to adjust to the notion that in the next decades China will become the clear number 1 country in many fields, and the US will be to China, what Germany is to the US.(Similar on a per capita basis, about 1/4 in absolute numbers) Wishful thinking is a terrible basis to plan.
- ironSkillet 4y ago
  Specifically, the problem is not having a large and young workforce productive enough to support the elderly population. Observe both the shape and growth trajectory of populations for America, EU, China, and other entities at: https://www.populationpyramid.net https://www.populationpyramid.net. I think a lot of countries are going to have a similar problem - it's not isolated to China. However, China's unfriendly immigration policies, combined with the very large skew in their population demographics (both age and gender) lead many to believe that there will likely be issues like the one I mentioned earlier.
  - UmbertoNoEco 4y ago
    Again, the median age of China is lower than the US and the UE. How is that a problem for China not for them? Skin color?
gscott 4y ago
Plus most of their infrastructure is poorly built. On this YouTube channel they lived in China for a decade and rode through it on motorcycles documenting their adventures. It is pretty amazing https://www.youtube.com/c/ADVChina https://www.youtube.com/c/ADVChina you learn beyond a few big Chinese cities pretty much everything is falling apart, shoddily built with no inspections, and not as rich as the government portrays. Demographics is certainly a problem but everything else is too... China is a house of cards.

That is certainly true but they also seem willing to go much further than any country has before in an attempt to reverse their population growth decline.

nuclearnice3 4y ago
what measures have they taken?
- jpgvm 4y ago
  The biggest one has been deflating their property bubble. It still remains woefully unaffordable but they have stalled the relentless rise in housing costs and have started to even bring them down in some cities. Their "housing is for living, not speculation" policy along with 3 red lines and directives to deleverage developer firms are all taking effect. They banned for-profit tutoring to bring down the cost of raising children (but also ensure children have time to be children). These services are now offered by or in-cooperation with the state school system and no-longer teach the same subjects as are taught during normal school hours. i.e they basically converted it into educational after-school day-care that is strictly non-profit. 1 child policy was replaced by 2 child policy, then 3 and finally abolished. Ironically this was only ever applied to Han Chinese, minorities like Ughyrs have always had uncapped family sizes (another massively misunderstood fact about China but getting into it would just lead to downvote brigade by people that have never even been to China). So yeah the plan is to reduce cost of living, drive down costs of having children in particular, allow people to have as many children as they want and soon I imagine we will see direct incentives to have children.
  - seibelj 4y ago
    Private tutoring will always be available to the rich. The various bans on personal freedom will keep life mediocre and ambitions small for the majority. China won’t reverse anything and their authoritarian nature will (as always) lead to ruin.
    - pm90 4y ago
      Authoritarianism doesn’t always lead to ruin. It does have negative effects (stifling innovation, increasing likelihood of disastrous civil wars and revolutions etc.) but its not a given. With China, we’ve seen it go both ways: Disaster under Mao and revitalization under Deng Xiaoping. What will leadership under Xi look like? Remains to be seen.
      - mr90210 4y ago
        Have you lived in an authoritarian country?
      - FredPret 4y ago
        Deng did well because he unclenched a little
        pm90 4y ago
        Yes he did. I don't know very much about him yet, but his life seems to be a fascinating one of gently guiding a failing state (that failed on epic proportions) back into normalcy and then into rapid growth.
    - chiefalchemist 4y ago
      If you compared China minus 50 years with China of today then ruin doesn't look so bad. Take away The West's (citizens) bailing out their financial markets (circa 2007 / 08) and again authoritarian ruin doesn't look so bad. I'm not stumping for China or authoritarianism; only pointing out that it's early days and there's more to that picture than brash big brush judgements.
    - alexashka 4y ago
  - wnolens 4y ago
    That's so interesting. I like all of those ideas in theory. Housing for living not profit, equality of opportunity for children, population at replacement (2 per couple) no more. I guess it really takes an authoritarian gov forcing it for those principles to be lived. North American politicians claim to be about some of these things, but it's structurally impossible in a free society.
  - bko 4y ago
    > Ironically this was only ever applied to Han Chinese, minorities like Ughyrs have always had uncapped family sizes (another massively misunderstood fact about China but getting into it would just lead to downvote brigade by people that have never even been to China). I'm from the west and I've never heard a defense or Chinese perspective. I understand that a lot of media we consume in the US is biased, especially on domestic issues abroad. Can you provide a link that explains the misunderstanding?
  - sleightofmind 4y ago
    I have a simple metric for judging the housing market (well, existing, single-family homes, anyway). I open Zillow, sort homes from Low Price to High Price, and count the number of price cut notifications on each page of 40-homes. I also exclude houses built in 2022. In Inland Southern California, very close to 25-percent of the homes have significant price cuts. Something similar seems to be happening in a few other places I'm interested in. Two months ago, in the community I live in, there were zero homes with a price cut notification on their listing. Now it's 25-percent plus. Yeah, my method is not sophisticated, but then neither am I. It is, however, up to date. I ignore prognosticating real estate experts... always.
spaceman_2020 4y ago
Still not convinced any measure can change the direction unless capitalism and the experiences and lifestyles it enables are killed completely. No amount of incentives have managed to push fertility rate above replacement level in any country as far as I can remember. The data from countries like India also shows that as soon as any region experiences even moderate prosperity, birth rates drop like a rock. Heck, India’s fertility rate is now below replacement level and it happened waaay ahead of schedule.
deleted 4y ago
[deleted]

puranjay 4y ago

Zeihan has the same thesis, plus insurmountable geographical challenges. Really hard to root for a country that now has a population rhomboid instead of a population pyramid. Soon to turn into an inverse pyramid aka a reverse ponzi where the old work to keep the few young alive.

eej71 4y ago

Agreed. Scott Rozelle's _Invisible China_ is very much worth a read on this topic. The author is not a China hater - far from it. But he lays out in sobering detail the substantial demographic challenge they still face and why they may not escape what is known as at the middle income trap. If anything, I came away with the understanding that while many fear a rising China, it is a China that stumbles that can be more worrisome.

dirtyid 4y ago
Even conservative GDP and growth estimates will put PRC in high income within a few years. Official 2021 per capita figures is $100 away, so theoretically reachable at end of year even with stymied covid growth projections. That said middle income trap is overstated to the point that it may not exist, including by OG researcher who coined the term. TLDR is middle income countries with successful industrial structure still generally grows significantly better than developed economies. As for Rozelle, he does good work. But reality is even with deficient interior education infra, PRC is still massively overproducing talent after massive brain drain. There's record youth unemployment, again some of which is covid driven, but talent oversupply was evident pre-covid. The demographic crisis is going to be difficult to negotiate, but ultimately PRC has too manypeople, specifically undereducated older cohorts that can't be integrated into modern economy. Whatever happens PRC will be better off with 1B people than 1.4B, simply too many mouths to feed. Meanwhile there's plenty of talent to go around to build comprehensive power which more than GDP undergirds national strength. Xi/CCP's vison for "moderately prosperous society" was $10000 per capita, leadership knows PRC has too many people to reach developing country incomes. The current pipe "China dream" is $40000 per capita by 2049 (100 year anniversary) probably not realistic but still a lot of overhead to improve productivity. Likely enough to establish PRC as geopolitical superpower even with at low high income level. At end of the day, a populous country with $20000 GDP and 20 aircraft carriers is still much more powerful than a small country with $100000 GDP and none.
- iabacu 4y ago
  One thing that you overlook is something that even Xi points out as an issue: right now, China needs more quality than quantity. For example, in semiconductors, Taiwan, with a much smaller population (and arriving late in the game) beat the US, Japan and Korea. China, with 600k STEM graduates per year, is still trying to catch up. On covid vaccines, even Russia has their own vaccine that reach mRNA levels of protection, but China is still stuck with the Covid Zero policy. Quantity was definitively an asset for Chinese growth based on cheap labor. That source of growth is almost running dry (to the point where they are resorting to labor camps). But at some point, quantity becomes more of a liability.

dirtyid 4y ago

Self inflicted moderate demographics problems to delay a massive one. Without family planning, PRC would be at 1.7B people. Currently at 1.4B more than 600M are, to be blunt, excess people - underedcuated cohorts that subsists in informal economy that can't be integrated into modern consumption economy. PRC would be tackling a much grimmer demographic bomb if it were not for restricting births.

UmbertoNoEco 4y ago

And what would be that problem? That sounds like wishful thinking. The median age of China is below of that both the US and the EU. https://en.wikipedia.org/wiki/List_of_countries_by_median_age https://en.wikipedia.org/wiki/List_of_countries_by_median_ag... A significant fraction of the US seems to have problem to adjust to the notion that in the next decades China will become the clear number 1 country in many fields, and the US will be to China, what Germany is to the US.(Similar on a per capita basis, about 1/4 in absolute numbers) Wishful thinking is a terrible basis to plan.

ironSkillet 4y ago
Specifically, the problem is not having a large and young workforce productive enough to support the elderly population. Observe both the shape and growth trajectory of populations for America, EU, China, and other entities at: https://www.populationpyramid.net https://www.populationpyramid.net. I think a lot of countries are going to have a similar problem - it's not isolated to China. However, China's unfriendly immigration policies, combined with the very large skew in their population demographics (both age and gender) lead many to believe that there will likely be issues like the one I mentioned earlier.
- UmbertoNoEco 4y ago
  Again, the median age of China is lower than the US and the UE. How is that a problem for China not for them? Skin color?

gscott 4y ago

Plus most of their infrastructure is poorly built. On this YouTube channel they lived in China for a decade and rode through it on motorcycles documenting their adventures. It is pretty amazing https://www.youtube.com/c/ADVChina https://www.youtube.com/c/ADVChina you learn beyond a few big Chinese cities pretty much everything is falling apart, shoddily built with no inspections, and not as rich as the government portrays. Demographics is certainly a problem but everything else is too... China is a house of cards.