Outside the Beltway

Outside the Beltway

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China’s Increasing Dependency Ratio

Dave Schuler
3

Relevant to the discussion of China’s slowing economic growth rate from yesterday, China’s working age population peaked in 2011:

ON JANUARY 18th the National Bureau of Statistics (NBS) announced that the number of working-age Chinese shrank last year by a total of 3.45m. In the slow-moving world of demography, that is a big turning point. The mobilisation of Chinese labour over the past 35 years has shaken the world. Never before has the global economy benefited from such an addition of extra human exertion. Now the additions are over…

This is a two-edged sword for China. On the one hand fewer people of working age means that China will not need to maintain as high a growth rate to avoid massive unemployment as has been the case in the past.

On the other hand it’s an increasing dependency ratio for China as far as the eye can see under current policy. And, as I pointed out years ago in a post at my own place on Chinese demographics, women of working age, the very group in highest demand for the intricate assembly jobs in many Chinese factories making the electronic consumer goods that are fueling much of China’s exports, are also of child-bearing age. The number of women of working age is actually declining faster than the number of men of working age.

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3 responses to “China’s Increasing Dependency Ratio”

  1. superdestroyer Avatar
    superdestroyer

    Most of Europe faces the same problem. Growing life expectancy coupled with lower fertility rates means that most countries will face severe budget and financial issues trying to pay for the elderly.

  2. Dave Schuler Avatar
    Dave Schuler

    There’s quite a bit of difference between France or Sweden and China. By world standards France and Sweden are rich; China is, at best, middle income. China is getting old before it gets rich. Not a good situation.

  3. JohnMcC Avatar
    JohnMcC

    The labor of young women has been a feature of industrialization since the mills in New England were powered by water wheels. They can be induced to labor more compliantly and cheaply than the equivalent cohort of young men I suppose. So one is not surprised to see the pictures of those hundreds & thousands of young chinese women putting I-phones together. The Asian unwillingness to allow women to advance economically is a brake on many economies;, the Japanese is an example. For the Chinese economy, their one-child policy which resulted in a lack of young females has been a disaster in many many respects. The cited article is only one. The Chinese economy is walking a knife-edge and if it fails it will be a huge failure that will affect the entire world; they are that large a segment of mankind.

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