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Page added on March 16, 2012
China Enters Era Of Slow Economic, Population Growth
As he prepares to leave office, Premier Wen Jiabao has a surprising message for the Communist Party: Get ready for democracy, or face trouble. Has the China Spring begun?
The media are filled with tales of how China will soon pass the U.S. as the world’s No. 1 economy. In fact, the nation of 1.3 billion faces monumental challenges that will lead to a slower economy, declining population and fiscal crisis in the coming years.
After growing at a 10% clip for nearly three decades, China’s economy is slowing. This year, the government estimates GDP will expand just 7.5% — barely fast enough to create jobs, income, investment and opportunity in such a vast developing nation.
That’s why Wen Jiabao’s comments are so important.
In remarkably candid remarks made this week to the National People’s Congress, he worried that unless his country makes major economic and political reforms, “the gains we have made in (the economy) may be lost.”
Worse, Wen said, a massive social upheaval like the ’60s Cultural Revolution — which led to the death of millions and near-collapse of the economy — is possible.
In his remarks, Wen pointedly referred to the Arab Spring (but also, slyly, to China): “I believe this trend towards democracy cannot be held back by any force.”
For China, more democracy and a freer economy are closely linked. China’s economy is still dominated by massive, highly indebted, low productivity enterprises that are owned by the state — or the Communist Party.
These state-owned enterprises are only about a third as productive as private ones, yet they soak up the bulk of Chinese financing. They must be privatized or closed to keep China’s economic bubble from bursting.
Even the World Bank, in a startling report issued earlier this month, warned that China will have to reform its economy or “face crisis.” Top-down decision-making just doesn’t work — in politics or in the economy.
And it must move fast. The “one-child” rule instituted in 1978 has led to a population bust. China will lose about 45 million people aged 15-24 — prime working age — over the next decade, a more than 20% decline.
In short, China’s running out of workers just as its population turns old. By 2035, one out of five Chinese will be over 65. Who’ll care for them?
This is why Wen — and others — are worried.
China’s impressive growth spurt is ending just as its population is peaking and getting older. It’s a recipe for social unrest and economic crisis.
Those who call this the “Chinese Century” aren’t looking at the real trends.
7 Comments on "China Enters Era Of Slow Economic, Population Growth"
Johny K on Fri, 16th Mar 2012 3:39 pm
The only thing China can produce are extremely huge amounts of child toys for the USA kids. After being received as presents, they are thrown away even before they break.
If the USA goes, so does China. In a collapsing world economy, nobody needs their stuff which breaks as fast as you can spell.
I am also thinking about buying some “last stuff” before the world economy collapse. But sorry China, that will not be a Chinese bicycle which will break in about a month. It will not be Chinese hand tools which are sometimes made of plain iron, not even regular steel. It will not even be a Chinese torche. Of course, I thought that a torche is such a simple device that it is almost impossible to produce it wrong. I am sorry, but – when I saw a China made torche I understood that it IS possible.
Kenz300 on Fri, 16th Mar 2012 6:00 pm
Endless population growth is not the solution it is the problem. Resources, water, food and energy can not keep up with population demands. A slowing population growth will lead to a more sustainable economy with a balance between resources, jobs and population.
WhenTheEagleFlies on Fri, 16th Mar 2012 6:47 pm
The “one-child” rule will lead to more than just a population bust. Psychologically speaking, only children, or “onlies”, have a reactionary strain. Look for that generation to lead a return to communism, especially when it becomes clear that China is no modern, rich nation.
Anvil on Fri, 16th Mar 2012 9:44 pm
It good to see everyone sing MSM and trolling on china together.
Alternative media only in name sometimes.
kiwichick on Fri, 16th Mar 2012 11:58 pm
and of course the us of a is doing so well
without import of cheap resources the us collapses in a heap
if interest rates rise the us is in deep sh#t
and of course the us is still on the population ponzi scheme
BillT on Sat, 17th Mar 2012 12:50 am
Well, yes, China’s growth is DOWN to 7% whereas, the US ‘un-growth’ is about minus 5%. And, yes, there will be an elderly problem in China, but it is hitting the Western world NOW…not in 20 years or so. And as for how China will handle it, probably as well as the Us will handle their elderly problem.
After all, 10,000 retire in the Us EVERY DAY! And that will continue for the next 15+ years until the 70+ million Boomers are retired or gone. Meanwhile, their retirement plans are being trashed and stolen and they too will be among the poor before they are dead. Americans are living in a state controlled propaganda bubble. Too bad.
As for the elderly in Asia. Family ties are still very strong in Asia. The young take care of the elderly. And the state will take care of those who have no family, but that will be a small percentage. And yes, this IS the Asian Century, no matter what Americans want to believe.
BillT on Sat, 17th Mar 2012 12:53 am
Johny K, they may make junk toys, but they also make the fastest, largest computer in the world and stealth jets. Not to mention missiles that are capable of sinking aircraft carriers and bringing nukes to the shores of the Us. Not too shabby, I think.