China’s Aging Population Bomb could lead to Economic Collapse

China’s Aging Population Is a Major Threat to Its Future. A potential risk to pile up on the existing debt. China's policy of limiting one child per family has really hamstrung its future economic rise. China is going to start running out of workforce/consumers/taxpayers as their population ages and fails to refill its younger generations. You’re seriously screwed when your young workforce dwindles, especially when your economy is built in vast, cheap labor.Aging population is It’s the Number one economic problem for China going forward, China is risking becoming gray before it becomes rich. Welcome to The Atlantis Report. The Chinese population is aging fast, with fewer young people and more and more of the older generation. This happened because of the one-child policy under Deng. This aging population will lead to Less and less young working population whose contribution has to take care of the large nonworking older generation Since the number of the working younger population is less, it will lead to higher wages and make the Chinese low tech manufacturing like garments leather electronics, etc. uncompetitive. The high tech manufacturing anyway is still with the western countries. China had introduced its one-child policy in 1979 but relaxed it in two stages in 2013 and 2016. In recent years, the government has become worried that the country’s declining working-age population will not be able to adequately support economic growth or finance the pensions of its older demographic. China’s birth rate fell to 17.2 million in 2017 from 18.5 million in 2016, according to a Straits Times report. About a quarter of China’s population will be aged 60 or older by 2030, the report said. But those efforts are colliding with social, cultural, and economic barriers. For example, younger people, especially in urban areas, prefer to delay marriage and have no more than one child. Employers frown at women who are planning to have a second baby; doing so could mean a demotion or denial of a job. Also, real estate prices are rising, so larger families face higher housing costs. Additionally, the one-child law has pervaded into Chinese culture to the point that even if the government started to promote numerous children per family, it might not catch on. Furthermore, imperialists in China have found that ideal efficiency in manufacturing can be found by cramming women into dorms. Men tend to cause trouble. So, women are further segregated from men. These same people aren’t willing to introduce men back into these female workers bc they have iPhone quotas to meet. Additionally, the Chinese cost of labor has increased tenfold since 2000 and is now higher than in Mexico. Not great for China when you add in the fourth fasting aging population. Given Mexico’s increasing dependence on energy from the US makes them just a bit more favorable to deal with than China. So why not use Mexico for manufacturing instead of China? It’s happening. Mexicans don’t mind having lots of children. Aging in the world's most populous country means pension contributions by workers no longer cover retiree benefits, forcing the government to fill that gap since at least 2014. Pension expenses rose 11.6 percent to 2.58 trillion yuan ($520 billion) in 2016, leaving the government a 429.1 billion yuan tab to cover the shortfall, according to the latest available data from the Finance Ministry. At the end of 2018, 11.9 percent of China’s population (166.6 million people) were 65 or older, according to data from China's National Bureau of Statistics. Generally, a society is considered relatively old when the proportion of the population aged 65 and over exceeds 8 to 10 percent. This is the real issue at hand for China. It is all about money—whether or not China has the money to provide a decent wage and health care for its population and elder citizen—-whether or not the Chinese government will be able to and willing to. One of the significant differences between China and Japan’s aging population issue is that China has more than enough labors and not enough jobs. But it's worth pointing out that a higher proportion of pensioners, who consume but do not produce, should lead to a structural increase in the share of consumer spending in GDP. A good percentage of the aging population, with the support from their children and grandchildren, will spend more.“A structural increase in the share of consumer spending “ is precisely what the Chinese government long been hoping and pushing for. The “sweatshops” are almost history; manufacturing jobs in China will eventually move aboard or simply just vanish. However, cruel this may sound; it is a good thing for China when it will lead to a smaller population in the foreseeable future, less pollution, and a healthier economic structure. The aging of populations, particularly as accompanied by the rapid growth in numbers of elderly people and by the fall in numbers of working-age people, is a real phenomenon. Different societies do need to factor this into their evaluations of future developments. Dealing with the problems may well be manageable—in China’s case, I can imagine that a combination of further investment in education and technological innovation, shifting labor towards relatively more productive sectors of the economy and boosting workplace participation, even immigration—but the problem has to be dealt with. Without this, China can well face a catastrophe. China has recently redoubled its efforts to boost its population, using both carrot and stick. Some Chinese provinces are offering tax benefits, housing, and education subsidies, and more extended paternity and maternity leave to lift birth rates, according to a report in The New York Times. In some other provinces, abortion clinics face new restrictions, and it is becoming more difficult for women to access them. Chinese courts are joining the effort by trying to dissuade couples from divorcing, and enforcing cooling-off periods, as The Economist reports. The cost of housing is also a significant deterrent to having more children in China. The Chinese families tend to prepare their children’s home when they get married, and [having more children] just doubles or triples the burden. The new policy of encouraging couples to have more children applies mostly to urban and coastal areas where the one-child system was strictly implemented, and which happen to be relatively more expensive places to raise children. There are all sorts of economic reasons for not having additional children, and some of it has also become habit. The people who are now of childbearing age grew up as single children. They’re not used to the idea that a family has multiple children. An estimated 1.5 million retired snowbirds flock to Hainan from China’s frigid northern provinces every winter, and if current trends continue, the migratory pattern is set to expand rapidly. By 2050, 330 million Chinese will be over age 65. Good news perhaps for property owners in Hainan, but dire news for the prospects of the world’s second-largest economy–and for those around the world who rely on it. If current trends continue, China’s population will peak at 1.44 billion in 2029 before entering “unstoppable” decline, according to a Chinese Academy of Social Sciences study released in January. The country will open an “era of negative population growth,” the report says, warning that by 2065, numbers will return to the levels of the mid-1990s. Fewer people means less domestic consumption, and thus rapidly slowing economic growth. The ratio of young to old will be dramatically imbalanced by the rising ranks of the elderly, putting unprecedented weight on the ties that hold society together. China feared it may lose in its “Race with Rice” to feed an exploding population. Population doubled in 30 years, and was forced like 115 other nations to adopt family planning. With a biocapacity of about 1 GHa per capita, instead of 3.38 needed; 20% population with only 7% arable scared the hardiest of CPC warrior leaders. China’s One Child Policy was the biggest and strictest. How does the one child policy impact social and economic outcomes? China like some nations is facing aging problem, perhaps the most severe after Japan, plus a few other red flags. Next the big challenges. A shrinking, less competitive and aging workforce? Less young to support the old, social and family burden. Greater need for services to support the families and care of old. So what can China do? Guess What? I don’t really know. But I reckon China has lots of advantages many don’t even have. China could do some of the following: #1. Study the experiences of Japan, South Korea, and USA on handling aging. (eg. Japan is the most super aged nation. Most expert – system funded by mandatory premiums paid by those over 40, as well as local and national taxes). #2. Increase birth rate as priority, the 3 piglets stamp was a hint. China will incentivise with a slew of policies. Social credits may be used. Needs to push fertility rate to 1.8 to 2 quickly. #3. Increase Retirement age – typically 50-60, has to increase. #4. New China need to enrich economy and increase with higher disposable income. Smart long term investments and build enormous reserves. Safeguard for the future generations. #5. Strengthen the social welfare system and senior-care capabilities - medical, insurance, nursing, geriatrics, etc. (plenty of commercial opportunity to come). Increase pension funds. #6. Policy and Long term planning, access to AI and essential data to plan and finetune policies. #7. Transform its economy to finance, services, high tech, and consumerism driven, that is higher value add to earn more. Automation and high-end industry to reduce need for a considerable workforce. #8. Strengthen social values and support structure – China should have an advantage. Strong family (3 generations), deep-rooted customs, communal traditions, and a high savings culture. Help ameliorate some social challenges. #9. Distribution of wealth. It is no secret the 1% in any country holds enormous wealth. If any nation can re-distribute or shift wealth, China can. The paradox, I think, is an inefficient, short term, divisive, unauthoritative democratic system may not work for China when faced with complex issues of such immense magnitude. Democratic die-hards and believers will differ, but Authoritative China may be luckier here in that Zhongnanhai don’t need debates and populist voting - just do what is right or useful for the nation. We can probably tell more in a decade and then at the next centennial national goal in 2049. This problem is not just about China, it is a mankind problem.










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