Most people think China is the next superpower. But the truth is that China has a catastrophic problem.
China is facing an unprecedented age demographic crisis where the number of old people is rapidly outpacing the number of young people.
What Caused This?
The One-Child Policy: Implemented by the Chinese government in 1979 to control population growth.
Why?
In the 1950s, population growth started to outpace the food supply. In 1964 life expectancy skyrocketed by 5% and steadily increased by year. In the 1970’s economic growth skyrocketed after several important policy changes made by China.
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One-child policy resulted in a large reduction in birth rates, creating a significant age imbalance in the population.
Created a “4-2-1” problem:
- Where one child is responsible for supporting two parents and four grandparents.
The problem has compounded because of urbanization. Chinese citizens are moving to cities and adopting urban lifestyles at a higher rate, causing the desire to have more children to decrease.
The cost of raising a child in a city, along with the time and effort involved, has discouraged many young couples from having children.
How this impacts China today and going forward
- Fewer young people entering the workforce to support the older generation
- Shrinking workforce is leading to labor shortages
- Reduced productivity and economic growth
- Increased labor costs and reduced China’s competitiveness in the global market
Economic impact
- Decreased consumer spending
- Older populations tend to save more and spend less, leading to decreased consumer spending, which is devastating for economic growth
- Household consumption accounts for less than 40 percent of China’s GDP (National Bureau of Statistics of China)
- Ranked 144 in the world for (Household consumption as percent of GDP)
- The United States is 68%
The only way to fix a problem like this is through mass immigration. Unfortunately for China, it has had a negative net migration rate for the last 50 years.
China is going to have major problems over the next decade.
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