Many are predicting that China’s economy is set to take over the world. According to the IMF China will overtake America as the world’s largest economy in 2017. However, before we start looking to China as the next world superpower, the country’s dire demographic outlook needs to be taken account of. It will almost certainly hold the country back. Yet, despite this, unnatural government restrictions on childbirth persist.
This month The Economist published on its website a very interesting discussion between its China and Globalisation editors, who warn that “China will get old before it gets rich”. The interview highlights the problem of the rapidly falling fertility rates in many countries around the world, and gives a good explanation of why demography really is destiny. It is worth a look and you can view the clip here.
In China the demographic problem is particularly serious with new graduates entering the workforce expected to halve in a generation. Worryingly, unlike America, China is unlikely to be able to rely on immigration to prop up its falling birthrates and increase these numbers. The Economist reports this fall as “astounding” and as having “very very big economic consequences”. How can a country survive on one young and productive worker supporting potentially four grand-parents and two parents? The country serves as a reminder to the rest of the world to be wary of birth rates dropping too low.