Demography is not destiny for China or anyone else

Here are two often repeated clichés about China’s future. It is growing old before it becomes rich, and it has grown powerful before it becomes rich. Since the county’s economic miracle is likely to have come to an end, and it is facing a demographic decline, perhaps there will even be a collapse in the coming decades. It’s basically game over. At this point, the anti-China crowds might want to cheer and uncork champagne. The only problem is, probably all of them will be from countries that are facing the same greying population problem – except those from America. The United States, it turns out, has a pretty healthy demographic outlook, at least relative to all its major competitors. But that spells a different set of problems relating to immigration and the fractious domestic politics it has created, something we will return to below. China’s demographic problems are well-known. The second in a three-part series in this newspaper delves into its unprecedented challenges presented to the nation, so I won’t repeat them here except where specific numbers are relevant. As is often the case in discussions about China, the global context is missing. Not only is China not unique in facing those problems, but also is not in the worst position, even in East Asia – everyone has the same or a similar problem. In short, depopulation is a global issue, not just China’s. Consider Japan, South Korea and Taiwan. Here’s an example of why people should always remember correlation is not causation. A while back, since all these places, and China and Singapore, have experienced an “economic miracle”, there was this idea about their common background of Confucian culture, with its emphasis on family, duty and thrift, which supposedly promoted economic development. Perhaps now someone will argue Confucianism leads to demographic decline! But that aside, if you want to see how demographic collapse, or even what population disappearance might look like, go no further than South Korea. If current trends continue, the Korean population will fall by a staggering 95 per cent over 100 years from its peak. How? By 2050, it will have three deaths for every birth. The median age will hit 60. More than 40 per cent of the population will be senior citizens, and more than one in six will be over the age of 80. The country will have only a fifth as many babies in 2050 as it did in 1961. It will have about 1.2 working-age people for every senior citizen. I am quoting these numbers from a fascinating new essay in Foreign Affairs, “The Age of Depopulation – Surviving a World Gone Grey” by US political economist Nicholas Eberstadt. He wrote: “By 2022, every major population there – in China, Japan, South Korea and Taiwan – was shrinking. By 2023, fertility levels were 40 per cent below replacement in Japan, over 50 per cent below replacement in China, almost 60 per cent below replacement in Taiwan, and an astonishing 65 per cent below replacement in South Korea.” It’s interesting that Washington has been trying to line up Korea, Japan and Taiwan against China. Will it end up with a sorry group of greying Asian countries slugging it out? The sight of that will be both tragic and comedic, so let us hope it won’t come to pass. It’s the same population story with America’s major European allies. According to Eberstadt, “For half a century, Europe’s overall fertility rates have been continuously sub-replacement. The 27 countries of the current European Union are about 30 per cent below replacement today. Together, they reported just under 3.7 million births in 2023 – down from 6.8 million in 1964. “The [UN Population Division] has marked 2019 as the peak year for Europe’s population and has estimated that in 2020, the continent entered what will become a long-term population decline.” India, which is at the moment neither friend nor foe with China and the US but is cleverly playing both sides, won’t fare much better. According to Eberstadt, the country may enjoy a demographic dividend in the next few decades. However, he wrote: “India’s rise is compromised by human resource vulnerabilities … Ordinary Indians receive poor education. A shocking seven out of eight young people in India today lack even basic skills – a consequence of both low enrolment and the generally poor quality of the primary and secondary schools available to those lucky enough to get schooling. “The skills profile for China’s youth is decades, maybe generations, ahead of India’s youth today. India is unlikely to surpass a depopulating China in per capita output or even in total GDP for a very long time.” That leaves the US. “The United States remains the main outlier among developed countries, resisting the trend of depopulation,” he wrote. While its fertility rate of 1.6 births per woman last year is still well below the 2.1 replacement rate in affluent countries, it’s still relatively high. While depopulation is still possible, mass immigration offers a much healthier demographic outlook. That, though, presents its own domestic challenges, which are, however, outside the scope of Eberstadt’s essay, but I think it’s not difficult to see. Immigration has become an explosive issue in the US that is deeply dividing the country. The major European economies have the same problem with immigration as well as depopulation. What’s happening in the US had long ago been warned against by the late political scientist Samuel Huntington, and it became a reality with the rise of Donald Trump and far-right populism. In a country where the issue of race taints every social and economic problem, you add the myriad challenges presented by immigration, much of that illegal, and you have an explosive situation. Arguably, the southwestern United States is now more Spanish or Hispanic than Anglo-American, more Catholic than Protestant. Unlike Cubans in Florida, who are traditionally fiercely anti-communist and against Havana, many Mexicans and other South Americans continue to align their political values and beliefs with those of their home countries. Huntington predicts a cultural-political bifurcation with geographically distinct voting blocs, leading to domestic strife over values, resources, and racial and cultural preferences. The fact that surveys have shown a majority of Americans think a second civil war is at least conceivable within their lifetimes is an ominous sign. Search online and you can easily find a long list of books with titles like the second civil war or variants of it. Barbara Walter, a political scientist at the University of California San Diego, has attracted public attention in recent years with her claim that the US has now met many key indicators of civil war common around the world. She said a second civil war would not be like the last one with contending regular armies, but “more like a Siege of Terror: more like what we saw in Northern Ireland or in Israel”. So while the US undoubtedly enjoys much better demography than that of China, many American critics underestimate social cohesion in China relative to that in their country. Depopulation is too monocausal an explanation. Interestingly, Lex Rieffel, a former US Treasury Department economist, and Wang Xueqing, a population specialist at Princeton University, offer a better question. Rather than making predictions based on the projected rise or fall of a given population, they have asked instead: what is the optimal population size of a given country? That is at once a much more difficult question to answer, but also much more relevant. For that, you need to study a host of key factors such as labour productivity, market flexibility, average education levels, and government planning competence relative to an economy and country. We are, after all, talking about extremely complicated economies and societies. Personally, I won’t write off any big country just yet simply because it may have what looks like bad demographics, but I won’t bet the ranch on any one of them either.

Demography is not destiny for China or anyone else

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Mass immigration gives the US a huge advantage over everyone else facing depopulation but it’s a double-edged sword that has escalated domestic strife

Mass immigration gives the US a huge advantage over everyone else facing depopulation but it’s a double-edged sword that has escalated domestic strife