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This is a major news event. Do not downplay it. Demographers have known for a long time that China's population was aging at an accelerated rate and the ratio o

This is a major news event. Do not downplay it. Demographers have known for a long time that China's population was aging at an accelerated rate and the ratio of workers to retirees was shrinking, from 10:1 during the Maoist era to 4:1 or 3:1 today. China's population growth had slowed in the last two decades. But I did not think I would see this happen so soon. The CCP might see a smaller population as easier to manage and control. But with the greying of China's workforce will come significant economic pressures. It will be more difficult for China to sustain high growth with a shrinking population. Actually, scratch that. It will be impossible. Welcome to the 2% annual growth club. It will also be difficult to escape the middle income trap. China got old before it got rich. The cynic in me would say that the CCP would turn a blind eye to leting Covid rip through the country in order to purge the ranks of economically unproductive seniors.

toomuchtodo 4y ago
Excellent comment. Also, for note, the longer the total fertility rate is below replacement rate, the more that trajectory is “locked in” due to the fertility death spiral (shrinking pool of women of childbearing age as a function of time). There is no turning back for China, they did not reach economic escape velocity due to mismanaged demographic and economic central planning policy.
- dirtyid 4y ago
  >fertility death spiral ... >no turning back UN annual births estimates for PRC are still 9M down to 5M births per year by 2100 @ 800M pop. Hardly a death spiral, that's still an absurd amount of people / talent generation, world leading levels regardless of which side of the 95% confidence interval one wants to draw from. Central planning reforming academic, R&D, S&T, industrial infra means instead of currently 5M STEM it will be "merely" 3M STEM per year over next 70s years = PRC will still be aggregating massive productive talent relative to peers. Likely scenario is PRC will be 2nd largest country after India, except one instead with current talent composition of roughly 3 Japans and 5 Nigerias, it will be 6 Japans, i.e. still a very large country and significantly more formidable productively than now. I don't know what "economic escape velocity" means, but PRC has built all the prerequisite blocks for advancing the economy. There's a lag effect between popping out 10s of million STEM over the past 10-15 years and converting that talent to economic output. Which indicators from various S&T indexes and PRC moving up the value chain in the last few years suggest is well underway.
jesuscript 4y ago
China got old before it got rich. That’s a provocative thing to say. What should China do if that is indeed the case? They can’t continue being the world’s factory if they only have 1-3 kids per family.
- amalgamated_inc 4y ago
  Provocative? It's already baked into the cake. The nice thing about demographics is we can predict them decades into the future, unlike much else. There is nothing China can do. They lost. They won't ever escape the Middle Income Trap.
  - dirtyid 4y ago
    It's not provocative, but also just wrong. >They won't ever escape the Middle Income Trap. … >There is nothing China can do. Yes, and that's all PRC has to do. Literally nothing. All PRC has to do to escape the middle income trap is wait for the unproductive old die. PRC already escaped the actual middle income trap which is being stuck in industrial development that caps per capita GDP... for medium/large size countries. Reality is that the PRC can escape this trap, be competitive in every sector (as it currently is) and still have a net per capita GDP lower than high income, because there's simply too many people. The other reality that's "baked into the cake" is even at 2% growth, PRC will enter high income in a few years. But the more people die, the FASTER PRC will enter upper income because most deaths will be front loaded by the 600M unproductive and generally elderly who got passed over during modernization, stuck in the informal economy making 2000 USD per year. That's merely 1/18T of the economy. Contextualized another way, the bottom 40% is responsible for 5% of economic inputs. Shed 300M of that cohort as projected by ~2050, and PRC per capita GDP grows to 15000 USD assuming no growth, shed ~600M as projected by 2100, and it's 21000 USD. PRC enters high income by merely doing nothing. > They lost. The other demographic prediction is that the PRC demographic is being reorganized to be disproportionately high skilled WHILE net population reduces. This means PRC will have more productive capability and less import dependency. For the PRC whose constraint has always been too many unproductive people than land can support comfortably, that's about the most winning formula there is. It's no exaggeration to suggest PRC is amidst the process of cashing in the largest high skilled demographic dividend in recorded history and will continue to for at least decades.
dirtyid 4y ago
>Do not downplay it Alternatively, do not overplay it with popular but flawed Zeihan analysis. By 2050, PRC will be replacing 300M generally unproductive, undereducated seniors with 200M new births who will be disproportionately educated. We're talking another ~100M STEM workers at current rates. All the news last few years of PRC moving up value chain, leading science and innovation indexes (controlled for quality not just citations) was built off lag effects of ~30-40MM STEM graduates from 00s-20s as result of 90s academic reforms finally delivering, only now are PhDs and R&D exploding, expect productive application to explode in next 10 followed by decades of sustained growth in every sector since PRC pop is still large enough to produce talent of roughly OECD block combined. Now augment that with aggressive automation and you have a recipe for _quality_ development. How that translates into GDP numbers is difficult to say, but it’s not just a matter of PRC growing but PRC moving up the value chain and stealing shares from existing developed incumbents, i.e. how PRC auto exports in the last few years is coming at the expense of developed country producers. PRC growing at 2% is still relative success if others grow at 0% or even contract. >middle income trap Even at 2% growth PRC is going to reach high income in a few years, but the trap part of middle income trap is really about being trapped in terms of industrial development for which PRC has already eclipsed in majority of sectors - at this point it's just leading edge semi conductors and commercial aviation. Nearly everything else PRC has solid footing in and continues to advance. The fundamental reality is that PRC, even with declining population, is generating 9M new bodies (while trending down), that's magnitude more than the US is projected to grow inclusive of immigration. But functionally, PRC has already escaped the actual middle income trap. >China got old before it got rich. Part of PRC got old before it got rich, primarily underdeveloped interior provinces who frankly never had a chance, the 600M making 2000 USD per year or ~1T of 18T economy. Coastal tier 1/2 cities (and now increasingly 3+) PRC have been rich for a while, and for the purpose of being globally competitive and productive, that's really the demographic who is going to matter. More productive talent + less unproductive mouths to feed (less import dependency) = PRC has functionally increasingly optimal demographics for building national power relative to peers. A lot of western analysis confuses demographic decline with losing demographic dividend or stalled geopolitical competitiveness, but what PRC is going to experience is the most significant SKILLED demographic dividend in recorded history with decline in net resource dependencies, which is a recipe for building strategic power. Like population projection of PRC in 2100 is still 800M, which is 200M more than 600M US is projected to grow. Now that doesn't mean there won't be increased economic pressures dealing with aging society, but IMO much less western analysis assumes. PRC has some of the highest household savings rates specifically because most people do not expect the state to support them with onerous welfare safety nets. The ones that will get fucked will be disproportionately already the have nots, while the high end talented tend to come from privledged backgrounds already. If anything, expect this cohort to live easier lives as 4:1 dependency ratios means wealth transfers from relatively wealthy parents/grandparents into single childs or 8:2 transfers which will likely start consumption + baby boom among high income skilled workforce couples as wealth redistributes. The poor will die as most poors have died in human history, relatively unsupported and forgotten, but in PRC case, less poor than their predecessors. >cynic Cynically, most of high vulnerable 80+ population are frankly expendable and not worth the 5000 RMB paxlovid course. Even at the elite level, a bunch of 80 year old tenured professors making way for new blood is a win.
DiogenesKynikos 4y ago
> It will be more difficult for China to sustain high growth with a shrinking population. Actually, scratch that. It will be impossible. Many countries with shrinking populations have fast economic growth. Case in point: Eastern European countries have much faster GDP growth rates than Western Europe, even though populations have been declining across Eastern Europe (at a faster rate than in Western Europe). > The cynic in me would say that the CCP would turn a blind eye to leting Covid rip through the country in order to purge the ranks of economically unproductive seniors. The cynic in you would then have to explain why China went to such great effort to protect its population from CoVID for almost 3 years, while the West let it rip. Many in the West love China catastrophism. It's comforting to think that the US' main rival will collapse, all on its own. That's why Peter Zeihan is so popular. However, China's population decline is going to be gradual: it's going to go from 1.4 billion people now to 1.3 billion people in 30 years. This is offset by the younger generation being much better educated and economically productive than the older generations. The number of highly skilled workers will actually continue to increase over time. The main risk to China is not gradual demographic decline. It's the rivalry with the US, which threatens to wreck the globalized economic system that China (and most of the world) depends on, and which could turn hot in the near future.

toomuchtodo 4y ago

Excellent comment. Also, for note, the longer the total fertility rate is below replacement rate, the more that trajectory is “locked in” due to the fertility death spiral (shrinking pool of women of childbearing age as a function of time). There is no turning back for China, they did not reach economic escape velocity due to mismanaged demographic and economic central planning policy.

dirtyid 4y ago
>fertility death spiral ... >no turning back UN annual births estimates for PRC are still 9M down to 5M births per year by 2100 @ 800M pop. Hardly a death spiral, that's still an absurd amount of people / talent generation, world leading levels regardless of which side of the 95% confidence interval one wants to draw from. Central planning reforming academic, R&D, S&T, industrial infra means instead of currently 5M STEM it will be "merely" 3M STEM per year over next 70s years = PRC will still be aggregating massive productive talent relative to peers. Likely scenario is PRC will be 2nd largest country after India, except one instead with current talent composition of roughly 3 Japans and 5 Nigerias, it will be 6 Japans, i.e. still a very large country and significantly more formidable productively than now. I don't know what "economic escape velocity" means, but PRC has built all the prerequisite blocks for advancing the economy. There's a lag effect between popping out 10s of million STEM over the past 10-15 years and converting that talent to economic output. Which indicators from various S&T indexes and PRC moving up the value chain in the last few years suggest is well underway.

jesuscript 4y ago

China got old before it got rich. That’s a provocative thing to say. What should China do if that is indeed the case? They can’t continue being the world’s factory if they only have 1-3 kids per family.

amalgamated_inc 4y ago
Provocative? It's already baked into the cake. The nice thing about demographics is we can predict them decades into the future, unlike much else. There is nothing China can do. They lost. They won't ever escape the Middle Income Trap.
- dirtyid 4y ago
  It's not provocative, but also just wrong. >They won't ever escape the Middle Income Trap. … >There is nothing China can do. Yes, and that's all PRC has to do. Literally nothing. All PRC has to do to escape the middle income trap is wait for the unproductive old die. PRC already escaped the actual middle income trap which is being stuck in industrial development that caps per capita GDP... for medium/large size countries. Reality is that the PRC can escape this trap, be competitive in every sector (as it currently is) and still have a net per capita GDP lower than high income, because there's simply too many people. The other reality that's "baked into the cake" is even at 2% growth, PRC will enter high income in a few years. But the more people die, the FASTER PRC will enter upper income because most deaths will be front loaded by the 600M unproductive and generally elderly who got passed over during modernization, stuck in the informal economy making 2000 USD per year. That's merely 1/18T of the economy. Contextualized another way, the bottom 40% is responsible for 5% of economic inputs. Shed 300M of that cohort as projected by ~2050, and PRC per capita GDP grows to 15000 USD assuming no growth, shed ~600M as projected by 2100, and it's 21000 USD. PRC enters high income by merely doing nothing. > They lost. The other demographic prediction is that the PRC demographic is being reorganized to be disproportionately high skilled WHILE net population reduces. This means PRC will have more productive capability and less import dependency. For the PRC whose constraint has always been too many unproductive people than land can support comfortably, that's about the most winning formula there is. It's no exaggeration to suggest PRC is amidst the process of cashing in the largest high skilled demographic dividend in recorded history and will continue to for at least decades.

dirtyid 4y ago

>Do not downplay it Alternatively, do not overplay it with popular but flawed Zeihan analysis. By 2050, PRC will be replacing 300M generally unproductive, undereducated seniors with 200M new births who will be disproportionately educated. We're talking another ~100M STEM workers at current rates. All the news last few years of PRC moving up value chain, leading science and innovation indexes (controlled for quality not just citations) was built off lag effects of ~30-40MM STEM graduates from 00s-20s as result of 90s academic reforms finally delivering, only now are PhDs and R&D exploding, expect productive application to explode in next 10 followed by decades of sustained growth in every sector since PRC pop is still large enough to produce talent of roughly OECD block combined. Now augment that with aggressive automation and you have a recipe for _quality_ development. How that translates into GDP numbers is difficult to say, but it’s not just a matter of PRC growing but PRC moving up the value chain and stealing shares from existing developed incumbents, i.e. how PRC auto exports in the last few years is coming at the expense of developed country producers. PRC growing at 2% is still relative success if others grow at 0% or even contract. >middle income trap Even at 2% growth PRC is going to reach high income in a few years, but the trap part of middle income trap is really about being trapped in terms of industrial development for which PRC has already eclipsed in majority of sectors - at this point it's just leading edge semi conductors and commercial aviation. Nearly everything else PRC has solid footing in and continues to advance. The fundamental reality is that PRC, even with declining population, is generating 9M new bodies (while trending down), that's magnitude more than the US is projected to grow inclusive of immigration. But functionally, PRC has already escaped the actual middle income trap. >China got old before it got rich. Part of PRC got old before it got rich, primarily underdeveloped interior provinces who frankly never had a chance, the 600M making 2000 USD per year or ~1T of 18T economy. Coastal tier 1/2 cities (and now increasingly 3+) PRC have been rich for a while, and for the purpose of being globally competitive and productive, that's really the demographic who is going to matter. More productive talent + less unproductive mouths to feed (less import dependency) = PRC has functionally increasingly optimal demographics for building national power relative to peers. A lot of western analysis confuses demographic decline with losing demographic dividend or stalled geopolitical competitiveness, but what PRC is going to experience is the most significant SKILLED demographic dividend in recorded history with decline in net resource dependencies, which is a recipe for building strategic power. Like population projection of PRC in 2100 is still 800M, which is 200M more than 600M US is projected to grow. Now that doesn't mean there won't be increased economic pressures dealing with aging society, but IMO much less western analysis assumes. PRC has some of the highest household savings rates specifically because most people do not expect the state to support them with onerous welfare safety nets. The ones that will get fucked will be disproportionately already the have nots, while the high end talented tend to come from privledged backgrounds already. If anything, expect this cohort to live easier lives as 4:1 dependency ratios means wealth transfers from relatively wealthy parents/grandparents into single childs or 8:2 transfers which will likely start consumption + baby boom among high income skilled workforce couples as wealth redistributes. The poor will die as most poors have died in human history, relatively unsupported and forgotten, but in PRC case, less poor than their predecessors. >cynic Cynically, most of high vulnerable 80+ population are frankly expendable and not worth the 5000 RMB paxlovid course. Even at the elite level, a bunch of 80 year old tenured professors making way for new blood is a win.

DiogenesKynikos 4y ago

> It will be more difficult for China to sustain high growth with a shrinking population. Actually, scratch that. It will be impossible. Many countries with shrinking populations have fast economic growth. Case in point: Eastern European countries have much faster GDP growth rates than Western Europe, even though populations have been declining across Eastern Europe (at a faster rate than in Western Europe). > The cynic in me would say that the CCP would turn a blind eye to leting Covid rip through the country in order to purge the ranks of economically unproductive seniors. The cynic in you would then have to explain why China went to such great effort to protect its population from CoVID for almost 3 years, while the West let it rip. Many in the West love China catastrophism. It's comforting to think that the US' main rival will collapse, all on its own. That's why Peter Zeihan is so popular. However, China's population decline is going to be gradual: it's going to go from 1.4 billion people now to 1.3 billion people in 30 years. This is offset by the younger generation being much better educated and economically productive than the older generations. The number of highly skilled workers will actually continue to increase over time. The main risk to China is not gradual demographic decline. It's the rivalry with the US, which threatens to wreck the globalized economic system that China (and most of the world) depends on, and which could turn hot in the near future.