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The one that shocks me is that 300,000,000 Chinese retire in the next decade. This is going to hurt. No way the fed can stop inflation with these demographic t

The one that shocks me is that 300,000,000 Chinese retire in the next decade. This is going to hurt. No way the fed can stop inflation with these demographic trends.

SoftTalker 3y ago
Why is a large retired population inflationary? Retired people tend to be downsizing, and consuming less.
- mensetmanusman 3y ago
  Because the cost of goods out of China will increase as they are required to compete and raise salaries for the shrinking labor pool. This is happening with the service sector in the United States right now where getting manual labor done on houses has increased nearly 50% in a few years due to the lower population of workers.
  - MichaelZuo 3y ago
    This is counterbalanced by a falling exchange rate, if the USD strengthens enough per year relative to CNY. However that would mean less buying of government debt, less bank loans being issued, etc...
- chrsw 3y ago
  Consuming less than they generate?
- sdsd 3y ago
  Their reduction in productivity is greater than their reduction in consumption, so you have a large population that only consumes.
  - LUmBULtERA 3y ago
    Can that be assumed? A lot of people retiring may not be very productive in those last years, and if they're replaced by automation it could very well be that total productivity goes up when they retire. I wouldn't assume that either, my point is that I don't think either of these scenarios is a given.
  - endisneigh 3y ago
    Chinese culture is very different than western.
taylodl 3y ago
Inflation caused by a retired work force tends to correct itself - those retirees on a fixed income are incentivized to return to work. Whether those retirees can successfully return to some form of work will often hinge on their country's health care system - not for the retirees, but for the middle-aged generated that will become retirees. That is where the United States is already running into issues.
- kwere 3y ago
  China health care system is based on their single offsprings, that will be forced to shift hours from working/consuming to taking care of their elderly + offsprings. 8 Grandparents, 4 parents to take care on 2 working adults + 1 or more childrens. UnSustainable
renegade-otter 3y ago
If Xi decides to "cement his legacy" by trying to annex Taiwan, the consequences of that, together with this demographic bomb, will be absolutely devastating for China.
alephnerd 3y ago
As I answered below: If you want to see a country that has been old before it truly became rich, just take a look at Thailand. They are a large country with a below replacement TFR for decades, a high median age, and a relatively low median household income ($7k/yr) yet they have not collapsed. Most of this is because of social welfare - most high revenue industries are very highly skilled and this require a small skilled or semi-skilled workforce. Think industries like Automotive, Semiconductors, ONG Refining, Finance, etc - this is the Thai economy (tourism is actually a relatively small portion compared to those). Deploying tax money generated from those industries into social welfare such as expanded healthcare, expanded social services, etc helps minimize a lot of the issues at hand. China has been concentrating on building some form of a social safety net as well in a manner similar to TH, but it's at an earlier stage, but tbf, TH hit the same issues China did today in the early 2000s.
- ninininino 3y ago
  Is there any publicly available information or data about Thailand's relevant tax revenues VS social welfare expenditures?
- lostemptations5 3y ago
  Re: Tourism -- I'm not sure 20% is a "relatively small" amount. Also it has alot of other impacts such as bringing in foreign investment, new skills, and so on.
- Ekaros 3y ago
  Low median income likely makes things easier to handle and not worse. Sustaining lower standard of living of dependants is more reasonable than very expensive one. And there is still quite a bit room to move up in value chain.
fallingfrog 3y ago
Yeah it’s very odd to me that people are so shocked that there’s a labor shortage when the whole boomer generation is retiring at the same time. I did a high school report on it in 1998; this is not a surprise. We all knew it was coming (or should have known.) Too much money chasing too little labor production equals inflation.

The one that shocks me is that 300,000,000 Chinese retire in the next decade. This is going to hurt. No way the fed can stop inflation with these demographic trends.

SoftTalker 3y ago

Why is a large retired population inflationary? Retired people tend to be downsizing, and consuming less.

mensetmanusman 3y ago
Because the cost of goods out of China will increase as they are required to compete and raise salaries for the shrinking labor pool. This is happening with the service sector in the United States right now where getting manual labor done on houses has increased nearly 50% in a few years due to the lower population of workers.
- MichaelZuo 3y ago
  This is counterbalanced by a falling exchange rate, if the USD strengthens enough per year relative to CNY. However that would mean less buying of government debt, less bank loans being issued, etc...
chrsw 3y ago
Consuming less than they generate?
sdsd 3y ago
Their reduction in productivity is greater than their reduction in consumption, so you have a large population that only consumes.
- LUmBULtERA 3y ago
  Can that be assumed? A lot of people retiring may not be very productive in those last years, and if they're replaced by automation it could very well be that total productivity goes up when they retire. I wouldn't assume that either, my point is that I don't think either of these scenarios is a given.
- endisneigh 3y ago
  Chinese culture is very different than western.

taylodl 3y ago

Inflation caused by a retired work force tends to correct itself - those retirees on a fixed income are incentivized to return to work. Whether those retirees can successfully return to some form of work will often hinge on their country's health care system - not for the retirees, but for the middle-aged generated that will become retirees. That is where the United States is already running into issues.

kwere 3y ago
China health care system is based on their single offsprings, that will be forced to shift hours from working/consuming to taking care of their elderly + offsprings. 8 Grandparents, 4 parents to take care on 2 working adults + 1 or more childrens. UnSustainable

renegade-otter 3y ago

If Xi decides to "cement his legacy" by trying to annex Taiwan, the consequences of that, together with this demographic bomb, will be absolutely devastating for China.

alephnerd 3y ago

As I answered below: If you want to see a country that has been old before it truly became rich, just take a look at Thailand. They are a large country with a below replacement TFR for decades, a high median age, and a relatively low median household income ($7k/yr) yet they have not collapsed. Most of this is because of social welfare - most high revenue industries are very highly skilled and this require a small skilled or semi-skilled workforce. Think industries like Automotive, Semiconductors, ONG Refining, Finance, etc - this is the Thai economy (tourism is actually a relatively small portion compared to those). Deploying tax money generated from those industries into social welfare such as expanded healthcare, expanded social services, etc helps minimize a lot of the issues at hand. China has been concentrating on building some form of a social safety net as well in a manner similar to TH, but it's at an earlier stage, but tbf, TH hit the same issues China did today in the early 2000s.

ninininino 3y ago
Is there any publicly available information or data about Thailand's relevant tax revenues VS social welfare expenditures?
lostemptations5 3y ago
Re: Tourism -- I'm not sure 20% is a "relatively small" amount. Also it has alot of other impacts such as bringing in foreign investment, new skills, and so on.
Ekaros 3y ago
Low median income likely makes things easier to handle and not worse. Sustaining lower standard of living of dependants is more reasonable than very expensive one. And there is still quite a bit room to move up in value chain.

fallingfrog 3y ago

Yeah it’s very odd to me that people are so shocked that there’s a labor shortage when the whole boomer generation is retiring at the same time. I did a high school report on it in 1998; this is not a surprise. We all knew it was coming (or should have known.) Too much money chasing too little labor production equals inflation.