Sunday, July 24, 2011

China and Its Population Trends

The Economist, in what is their equivalent to an editorial page, excoriated China because of its continuing attempt to apply its one-child policy. The lead to the article launched this charge:

“The one-child policy is not just a human rights abomination; it has worsened a demographic problem.”

We have discussed China’s attempts at population management elsewhere. We will grant the author that China’s policy is harsh, unevenly enforced, and subject to corruption. It may also not be very effective because fertility rates were declining before one-child implementation went into effect, and the increased affluence of the population would have driven fertility rates down anyway. What seems contentious is the claim of a worsening demographic problem.

Since The Economist is what it is, economics is a major focus. They are concerned that limiting births will contribute to the aging of the population, a trend that china may not be in a position to accommodate.

“Between 2000 and 2010, the share of the population under 14—future providers for their parents—slumped from 23% to 17%. China now has too few young people, not too many. It has around eight people of working age for every person over 65. By 2050 it will have only 2.2. Japan, the oldest country in the world now, has 2.6. China is getting old before it has got rich.”

The author and many economists seem to equate economic health with the number of wage earners. Apparently, the belief is that since greater wealth and better healthcare will allow older people to build up in ever greater numbers, ever more workers will be required to contribute to their well-being. The only way this can happen is if China continues to grow its population. Do they really think that hundreds of millions more Chinese is doing anyone a favor—particularly the Chinese? China already has plans to build cities to accommodate 400 million more of its inhabitants. The materials, energy, water, and wealth required are of a scale with world-wide ramifications. They already have more people than the world can cope with.

The United Nations has posted its 2010 population prospects. Let’s assume these projections are accurate and see how China is doing—and compare it with its neighboring behemoth, India.

China’s population is expected to begin to decline around 2030. India’s is expected to continue growing. Between 2010 and 2050 China’s population will decrease by 46 million, while India’s will increase by 468 million, a number about equal to the current combined populations of the United States, Mexico, and Canada. Which country is being a good citizen of the world? With food prices at or near all time highs, food production growing at a declining rate, and climate change coming upon us, introducing population explosions is not good policy. So if China has managed to limit its growth, then good for them. If the result required harsh methods, then one should recall that the traditional means of reducing population—disease, war, and famine—are even harsher. If The Economist wishes to excoriate someone, let it be India.

The article also propagates the notion that an aging society is something that society will have trouble accommodating. That is not necessarily true. Japan is listed as an example of an aged society. My understanding of the country’s problem with their old people is not that they require so much attention, but that they are sitting on a huge amount of wealth that they refuse to spend. The real problem with an increasing number of retirees arises when these people are poor. Supporting an aging population is really a problem of wealth distribution. My guess is that in China a plan is in place to insure that the poorest elements of the population will see significant income growth. My suspicion is that India is probably considering about forty-seven options for accomplishing that goal.

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