China’s Inevitable Decline?

Posted on Oct 24, 2013

Some of you may recall that we have studied and worked with researcher and demographic trend expert Harry Dent for many years now. Recently he made some very interesting points about China and we thought we would share those with you.
Dent predicts that China will be the first emerging country to see its demographic spending trends slow, as a result of its infamous one-child policy, which dates back to the 1970s.
He explains that back then, limiting the number of children each couple could have was a natural response to the problem of a poor, yet rapidly growing population.
But its implications today, and for the coming decades, are ominous.
Already China’s workforce growth has slowed in recent years. It will plateau for the next decade and then fall in the decades after that, just like what happened in Japan and what’s in store for other East Asian countries.
But there is more to the story than that…

What’s even more challenging is that the Chinese, like most East Asian cultures, prefer to have male children. So today, there is a stark gender imbalance in China. The country’s population consists of 51.9% men and only 48.1% women, as you’ll see in the chart below.
That’s a 3.8% gap, which totals 50 million people!

ChinaGenderGap

Dent explains that this is a problem because, when a society has too many men, there’s an increased tendency towards more violent crimes and more crimes against property (as a look at history shows). And countries with a culture of male dominance also have lower birth rates.
The result is that China’s birth rate is heading south. Already, at 1.55 (replacement is 2.1), it has the lowest birth rates per woman of any major emerging country. In comparison, India’s birth rate is 2.65.

 

Dent also explains that China is not alone in declining birth rates. In fact, China’s birth rate is not the worst out there. Spain’s birth rate is 1.48 per woman. In Greece it’s 1.40. In Japan it’s 1.39, in Poland it’s 1.32, in the Ukraine it’s 1.29, in South Korea it’s 1.24 and in Singapore it’s 0.79.  Bottom line per Dent, a quickly declining, male-dominated population doesn’t bode well for China’s economy, nor any of those East Asian, European and Scandinavian countries.

Dent offers really only one solution: Encourage immigration. Unfortunately, he says, this is not something the Chinese government is actively considering. Besides, who would want to immigrate to China? It has the worst pollution in the world and an almost impossible language to learn.
All of the other countries with birth rates well below replacement level are equally reticent to welcome foreign workers into their workforce.

Dent proclaims, “The reality is, kids are the future.”

He goes on to explain that without them innovation stalls, then spending declines, then political change slows and investments stagnate, or wane.

Dent recognizes that the world’s a different place today than it was back in 1800. He cites women as a force to be reckoned with in the workforce as just one example.
He goes on to say that cultures that don’t adapt to change will slowly die. Yes. Even China, he says.

Dent concludes with this quote: “It’s their choice, but the outcome, if they remain stuck in their past, is inevitable.”