Demographic time bomb? China’s army of young, educated and willing workers will keep economy on track

There are plenty of dire predictions around. China’s economy might suffocate under a mountain of debt. If not, then pollution – witness Beijing’s toxic skies – could bring growth to a screeching halt. If these arguments fail to impress, sceptics point to China’s supposed demographic time bomb: the country’s population is among the most rapidly ageing in the world. Having fewer workers, doomsayers argue, will put a dent in China’s bright future, decimating its impressive growth rates, which, for all the economy’s recent travails, are still the envy of the world.

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Well, the demographic issue at least will turn out to be more of a damp squib. True, at the surface, China is beginning to grapple with one of the most severe demographic challenges in living memory. Due to its one-child policy, the country is now ageing fast. By some estimates, its working-age population has started to shrink this year as more citizens retire than join the labour market.

Over the coming decade, some 3 million fewer workers will be available every single year. Parallels with Japan come to mind: the number of Japanese workers has steadily declined since the mid-1990s, leading to two decades (and counting) of stagnant growth.