China’s Demographic Woes By James Reed
Not everything is going swimmingly for China. First, there are demographic woes, even given the country’s pro-natalist policies:
“The birthrate on the Chinese mainland reached a record low last year, figures released by the National Bureau of Statistics on Friday showed. The total number of babies born last year was 14.65 million, a decrease of 580,000 from the previous year, while the birthrate stood at 10.48 per 1,000 population－the lowest over the past seven decades, according to the bureau. Meanwhile, total population on the mainland narrowly exceeded 1.4 billion by the end of last year, an increase of 4.7 million year-on-year. Last year marked the third consecutive year of falling births on the mainland despite the universal second-child policy having been adopted at the beginning of 2016. The policy, which encourages all couples to have two children, was designed to boost births to cope with rapid population aging. Births reached 17.86 million in 2016, the highest since 2000, according to the National Health Commission, but they fell to 17.23 million in 2017 and to 15.23 million in 2018. Ning Jizhe, head of the NBS, said at a news conference on Friday that despite the decrease, the total number of births last year on the mainland was still very big, and the universal second-child policy has played a very important role in encouraging births. The decrease last year was the smallest, he said. Births fell by 630,000 in 2017 and by 2 million in 2018. "Of all babies born last year, 59.5 percent were the second or more child, with the percentage rising over the past few years," Ning said. The percentage has remained at about 50 percent since the universal second-child policy was enacted, according to the National Health Commission. Despite the policy, many couples in China were not willing to have a second baby, for reasons such as the high cost of raising children and a lack of nursery facilities, according to a survey organized by the commission.”
By comparison, the US birth rate was 11.96 per 1,000 of population, compared to China’s 10.48 per 1,000 of population. It is not clear if this trend down will continue, but it may well be a product of modernisation, as women do not, and cannot, afford to have a second child. Time will tell. The worst case scenario will be to bring in a billion Africans to kick start the economy, because there is nothing migrants can’t do. Then the next problem is debt, which I know, some folk do not see as a problem, but conventional wisdom does:
“Like the many other similarly foolish western nations, China seeks only one path out of this fiscal death spiral, one that will likely spell doom and/or revolution in many countries soon: More debt. China is becoming increasingly unable to continue to pay into the base of the world’s largest pyramid scheme of an economy and the cracks in the bubble are showing. This past year, saw three of the 4,279 Chinese lenders almost fail, if not for the massive intervention by the People’s Bank of China (PBoC) of immediate liquidity via more debt. The Chinese economic miracle is built on unsustainable debt-based infrastructure projects over the past two decades that have provided China with a face of prosperity to show the world, but this is only a mask to hide the limited countrywide success of the Chinese miracle into the rural areas. The injection of $Trillions in capital has seen China distribute these sums across the base of its economy creating a GDP that hit a high of 14.2 % in 2007 then averaged nearly 9% for the next decade before dropping yearly to 6.1% in 2018. All this growth had produced a personal affluence to a sub-set of Chinese society that has stoked this appearance of a flourishing economy. This Chinese economic Keynesian trick of interjection of liquidity into national infrastructure is somewhat similar to the TVA and national works projects funded under Roosevelt’s depression-era New Deal. In this approach employment and therefore a growing tax base accelerated year after year as workers and corporations received the short-lived benefits of this massive windfall of available liquidity. China’s method of stimulus is of course distinguished from today’s American model that merely shovels the injection of its own manufactured $Trillions by using multiple fiscal tricks to by-pass the citizenry and instead shovel the cash straight into the wallets of the already super-wealthy. Meanwhile, the US peasant once again pines in the “Hope” of yet another election.”
On this question, too, time will be the best test.