China got old before it got rich.
That’s a provocative thing to say. What should China do if that is indeed the case? They can’t continue being the world’s factory if they only have 1-3 kids per family.
That’s a provocative thing to say. What should China do if that is indeed the case? They can’t continue being the world’s factory if they only have 1-3 kids per family.
If we're going the high population route: start accepting massive numbers of skilled immigrants in sectors with labor shortages. Or raise the financial incentives to have kids. The latter is already being done in China and in many other countries (Japan, SK, Eastern Europe, etc.) to little effect, so what it would take would be something like $200k tax free for your first child, $150k tax free for your second, $100k for your third, and nothing for your fourth child and above. And phase out the incentives if a baby boom actually happens to avoid inflation.
If we're going the low population route: invest more in automation (already being done), education (already being done), and worker productivity (also already being done).
There is nothing China can do. They lost. They won't ever escape the Middle Income Trap.
>They won't ever escape the Middle Income Trap. … >There is nothing China can do.
Yes, and that's all PRC has to do. Literally nothing. All PRC has to do to escape the middle income trap is wait for the unproductive old die.
PRC already escaped the actual middle income trap which is being stuck in industrial development that caps per capita GDP... for medium/large size countries. Reality is that the PRC can escape this trap, be competitive in every sector (as it currently is) and still have a net per capita GDP lower than high income, because there's simply too many people.
The other reality that's "baked into the cake" is even at 2% growth, PRC will enter high income in a few years. But the more people die, the FASTER PRC will enter upper income because most deaths will be front loaded by the 600M unproductive and generally elderly who got passed over during modernization, stuck in the informal economy making 2000 USD per year. That's merely 1/18T of the economy. Contextualized another way, the bottom 40% is responsible for 5% of economic inputs. Shed 300M of that cohort as projected by ~2050, and PRC per capita GDP grows to 15000 USD assuming no growth, shed ~600M as projected by 2100, and it's 21000 USD. PRC enters high income by merely doing nothing.
> They lost.
The other demographic prediction is that the PRC demographic is being reorganized to be disproportionately high skilled WHILE net population reduces. This means PRC will have more productive capability and less import dependency. For the PRC whose constraint has always been too many unproductive people than land can support comfortably, that's about the most winning formula there is. It's no exaggeration to suggest PRC is amidst the process of cashing in the largest high skilled demographic dividend in recorded history and will continue to for at least decades.
Good lord, they must be tired of winning over there. That's just under Latvia!
PRC shedding unproductive people in 100s of millions is a massive, massive win.
BTW PRC current at 12550 per capita (2021), latest world bank high income cut off 12700. If PRC grew @2% last year and it'll be high income right now, but likely next year after covid recovery rebound. All of which is to say, PRC entering high income by per capita GDP is forgone in short term, but that's an exceedingly stupid measure since again, the trap in middle income trap is being stuck in industrial upgrading, which PRC has blown past most developed countries with much higher per capita GDP. Apart from US, no one else has nearly as complete an industrial chain as PRC.
https://blogs.worldbank.org/opendata/new-world-bank-country-...
This World Bank list classifies China as "Upper Middle-Income" which they define as $4,256 to $13,205.
On the other hand they classify Taiwan as "China" which is just pure CCP shilling lol.
Fun fact: the Communist Chinese are the poorest Chinese in the world. The Chinese are a brilliant and industrious people, and they succeed everywhere - but especially in America, Taiwan, Singapore, and formerly Hong Kong. Only the CCP is holding them back lol.
Operationally this means trading surplus lives for progress. The great leap forward killed millions, but ensured PRC also had the highest industrial capacity amongst developing peers after. Cultural revolution broke traditional social structures = 90%+ unified polity, speaking one language. Purging intelligentsia was overkill, but still had STEM priorities right, both nukes + first satellite developed in this era. In aggregate, disruptions setup/enabled PRC to exploit mass modernization efforts, established industrial bases, and plenty of fungible bodies. Incidentally this is why pluralism of India and old practices (caste) etc is holding up development, India systemically couldn't destroy to renew, now it’s dragged down by the baggage.
Here’s the thing about “ego tripping”, when the destination is to grow comprehensive power, and now CCP tripped their way into near peer power status in 50 years, then perhaps the egos planned the trip successfully.
And we'll see if Zeihan is correct about China falling in sub 10 years. I think it might hold on longer, but who knows.
China'd be lucky to exist in 2050.
Of all the Zeihan tier analysis this one is the weakest. The entire point was PRC simply had too many excess people, more than even a competent state can handle. India having 1.7B by 2050 with significantly less capability to organize or generate talent is recipe for much greater disaster. BTW if you think CCP lying on population (like the 1.3B guestimates) then it would have entered high income years ago. Keep in mind if PRC was going to lie, it's going to over report population or under report GDP, in combo to NOT become high income since she'll lose developing nation perks.
Anyway, India has much worse demographics trend than PRC. All the productive Indian states with good HDI indexes like education are trending where PRC is in terms of births - most births are being generated in back water states, the kind that produced 600M informal workers in PRC. For reference, reason so many left behind in PRC was manufacturing peak employment was like 300M, world demand was not enough uplift every PRC citizen like it did small Asian Tigers with fraction of population. India is never going to get 300M manufacturing jobs, geopolitics won't allow such concentration again, and most of it is going to ASEAN or held in PRC with automation. The PRC path for India is gone.
In short, India is trending towards the problems PRC planners were trying to avoid - 1.7B with majority doomed to poverty simply because there's no opportunity or resources. Combined with medicore governance and it gets even more grim. Like PRC relative to where India is right now in terms of gdp / level of development already had hosts of supply chains connected by massive amount of infra, HSR rolling at scale. India is way behind PRC milestones, which Indian systemically is not capable of correcting fast like in PRC 5 year plans. Again, those plans have 10-20 year lag effects - all the indigenous innovation, R&D, S&T from building up industrial and research base to convince top talent to stay vs getting brain drained to west is unfolding now. In short, India currently does not remotely have her shit together, and likely won't until mid century, if lucky, and by then she'll have a MUCH worse demographic transition to than PRC to handle. If anything expect her best and brightest to continue be brain drained to west while country hobbles along.
>China pissed off literally
Yet surveys last few years in region consistently conclude countries view PRC to be most important future partner, reflected in exploding trade / economic integration. Decompose out western influenced opinions (i.e. NGOs) and focus on leadership opinions it's embrace PRC economic orbit and balance US for security just in case.
>China'd be lucky to exist in 2050
Insert PRC will collapse 2000, 2001, 2002, 2003, 2004... meme.
While I wouldn't go as far as to say India has "its shit together" currently, their way of governance is way less centralized and heavy-handed, which I believe is way more efficient and sustainable and won't lead to such disasters as in China.
Of course India won't take exactly the China route - and it shouldn't, because that is (in my opinion) a bad route.
Then again my opinion is heavily Zeihan-influenced, so I suppose we'll see :) The trend in recent years has certainly seemed to reverse really quickly. Even 5 years ago, most people I knew were positive on China generally, or at least they'd argue that the economic benefits might outweigh the human rights violations. Now that's completely shifted, not just in The West, but also among pretty much any other nationality I've talked with in America, Europe, and Asia.
There's a need for low skill labour, but not that much. For reference US agriculture has 2M farmers and imports 2M seasonal foreign workers. Combine with automation that's all it takes to become one of the largest ag producers in the world. Meanwhile PRC has 200M farmers doing labour intensive farming simply to maintain a massive rural jobs program. India is even worse. There is a thing as having too many unproductive people.
As for attitudes toward PRC, it's sunk among US led order countries, had a big dip during covid, but is recovering in the last few years in the rest of the world, especially global south which all the western surveys and news reports leave out and pretend 1st world consensus is somehow world consensus. Ultimately, compare US containment proposals from 5 years ago and what actually got done, the TLDR is despite heavy lobbying by two US admins, and its evident economic benefits still drive most relations with PRC, and most US aligned parties aren’t voluntarily falling into US orbit, i.e. there’s a reason US had to announce unilateral export controls, because they couldn’t get CHIP4 partners to play ball.
Cordially dropping out of this thread now.