China’s Rapidly Shrinking Workforce Threatens Economic Growth

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  • Like Japan before it, a declining birthrate and an aging population have precipitated a drop in the proportion of the working-age population and the savings rates in China, impacting long-term economic growth
  • In response, China needs to boost the supply of labor through relaxing birth restrictions and raising the retirement age
  • China also needs to enhance productivity by further promoting reform and opening up while capitalizing on the vitality of its private companies

China’s birthrate has been declining due to its one-child policy, while population aging is gathering pace as life expectancy lengthens. The resulting drop in the proportion of the working-age population has acted as a constraint on economic growth. While low birthrates and population aging are phenomena common to developed countries, with Japan being a leading example, China has to face this severe challenge before it becomes affluent. Japan’s efforts to encourage childbirth, extend the retirement age and promote women’s employment, and to boost demand through the implementation of expansionary fiscal and monetary policies have failed to lift its economy out of stagnation. The major lesson for China from Japan’s lost decades is that raising productivity through structural reforms is the key to sustaining economic growth.

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www.nomuraconnects.com/focused-thinking-posts/chinas-demographic-timebomb-lessons-from-japans-lost-decades/

This isn’t new but it’s so bad.

Japan’s crash, esp real estate, had a similar type of pattern, but much less severe. Oh and china has way more invested in real estate as a proportion of savings.

The pattern (aging population) is also bad in many places like Korea and less serious but still legit in western Europe.

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The states generally have no ability to support this level of aging with a shrinking working population. But we seem to insist on putting our fingers in our ears and saying “lalallala” vs doing anything

To maintain population China would need roughly 5 times immigrants as the US, which means roughly 50m people after 10 years. There’s no way they can solely rely on immigration without destroying their own country and a few others.

h/t AdAlarmed69

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