China's working-age cohort just dropped:
On January 18th, the National Bureau of Statistics (NBS) announced that China’s working age population (ages 15-59) had declined in 2012 by 3.45 million, or 0.6 percent, marking the first decline in working population “in a considerable period of time.”
The head of NBS, Ma Jiantang, admitted: "I can't deny that I'm worried about this problem.” Indeed, the problem is perhaps more serious than originally thought. HSBC co-head of economics Frederic Neumann commented in the Financial Times, “Most projections . . . estimated that the decline in the working age population would start around the middle of this decade…but [the numbers] show it has already happened, which suggests the decline over the next few decades will be faster than expected.” UN figures showed that China’s total population would start declining after 2030, a number that senior Communist Party officials are now revising to 2020, by which point the China Development Research Foundation estimates that the working age population will decrease by another 29 million.
Eliminating the one-child policy would not cause a dramatic rise in population growth, although it would help out fifteen years down the line. Societal changes would keep the birth rate from shooting up. Worldwide birth rates are dropping dramatically without one-child policies, after all.
As the article notes, this problem is cropping up earlier than expected even a year ago when I discussed the implications of the imminent peak labor force:
Until now, much of China's growth has been based on the "Lewis turning point" that reflects direct inputs of new workers rather than more efficient use of existing workers. Once the direct input slows, wages rise and the comparative production advantage erodes. As I liked to say, take the most efficient peasant and take him from a farm and put him in the most inefficient factory and the GDP he produces goes up.
The years 2050 and 2100 may look very different from today where anybody who is anybody tries to predict when China takes over our top spot on the globe.
China has a lot more people than we do. Yet they may not have enough workers to complete their rise even though they've made tremendous progress.
China got their wish. Now they have to figure out how to cope with it.
And the coping may not be going well, if other statistics are being fudged (either as state policy or as a general hope of underlings that everyone else is being accurate and they don't want to be the only ones reporting disappointing economic strength up the chain of command) in China (tip to Instapundit):
When China announced better-than-expected trade numbers last month, the statistics were met with outright suspicion from international powerhouses such as Goldman Sachs, Swiss financial firm UBS and Australian bank ANZ. The disbelieving scoffing only mounted days later, when the government unveiled numbers showing yet another positive trend — a narrowing income gap between China’s rich and poor.
Numbers in China have long faced suspicion, from optimistic recordings of visibly hazy air to the age of its Olympic gymnasts. But the credibility of its economic data is now coming under particular scrutiny, at a time when China’s growing global role weighs on investors, analysts and governments worldwide, even as the country’s economy is slowing after years of unbridled growth.
China's rulers have replaced communist purity with economic growth as a reason to justify their control of the country. If economic growth falters, the Chinese may want to ramp up the nationalism that they've kept bubbling on the back burner just in case they need that rallying cry.
China's rulers may wish for that as better than the alternative of losing the Mandate of Heaven. But there is danger that they could be driven by those passions rather than controlling them for their own benefit.
If China has to rely on stoking nationalism rather than economic growth to legitimize the Communist Party's monopoly of power, we might want to speed up that pivot to Asia, eh?
