China’s Population Problem
China silences critics of the Communist Party
China imprisons minority Uyghurs in forced labor.
China requires foreign-owned businesses to divulge intellectual property.
China disregards patent protections.
China reneged on commitments to Hong Kong’s freedoms.
China threatens Taiwan’s independence.
China uses technology to spy on its citizens.
China places restrictions on where its citizens can live.
None-the-less, China needs some love.
Globalization has enabled China’s authoritarian government to lift nearly 800 million people out of poverty over the last four decades. China moved from state-owned enterprises to a more productive economy of fast-growing privately owned enterprises. And yet, as of 2020 some 600 million Chinese lived below China’s poverty line (about $5.00 per day). Chinese President Xi Jinping intends to spread “common prosperity” more widely among the population by enlarging the economy. But China faces both a looming demographic crisis and trade restrictions from Western countries.
China’s population fell by 850,000 in 2022. China’s one-child policy between 1980 and 2016, along with more education and career opportunities for women, have resulted in a fertility rate well below that required for a stable population size. China’s working-age population peaked in 2015 and began to fall; it is expected to be nearly 25% smaller in 2050 than 2015. The number of people 65 and over will double by 2050.
The last three years have brought vast changes in globalization. Covid-19 caused temporary reductions in Chinese manufacturing facilities, and shipping bottlenecks greatly increased the time required to get products to market. Multi-national corporations looked for shorter and more resilient supply chains, both for sustaining economic growth, and for avoiding overreliance on China. Concern over security has prevented some Chinese technology from entering US and EU markets. US legislation denying China access to advanced technology is intended to maintain US superiority.
According to US Treasury Secretary Janet Yellen, “We do not want a retreat from the world, causing us to forgo the benefits it brings to the American people and the markets for businesses and exports,” but concern remains over economic decoupling from China.
Xi Jinping sees these events as a clear threat. In February he declared, “Western countries led by the United States have implemented all-around containment, encirclement and suppression of China, which has brought unprecedented grave challenges to our nation’s development.”
Nathan Gardels, editor-in-chief of Noema Magazine, warns, “The path to war in Asia is all but certain if China, which over the last few decades has ‘arrived late’ to modernity in spades, becomes convinced that its future will be blocked by the West.”
In another recent article in Noema Magazine, China’s Looming Demographic Disaster – NOEMA (noemamag.com) a sociologist and historian at George Mason University, wrote that instability in China “is not something that Western nations should hope for.” Better for the West to help China “improve its economy and manage its aging population. That is likely to be a more effective path to winning cooperation on vital issues of climate change and regional peace, and to help China’s citizenry pursue their own goals of greater freedom and security.”
Goldstone asserts that China’s demographic future make it unlikely it will overtake US or EU economies. China also faces competition from its South Asia neighbors whose labor costs have risen much slower than China’s and are now one-third of China’s. Those neighboring countries – India, Malaysia, Philippines, Thailand, Vietnam – comprise an alternative supply chain that The Economist refers to as Altasia.
An unstable China is not safe for the rest of the world; neither does it ensure security for the mainland population. Sharp declines in China’s fertility and labor force will thwart Xi Jinping’s ability to deliver on his commitment to “common prosperity” and create what Goldstone predicts as angry populism and widespread popular uprising against China’s leadership. The best course of action is for the US to continue pursuing quiet diplomacy even as China pursues “wolf warrior diplomacy.” While China tightens national security on social media, combats domestic protestors, and denounces the West for all challenges to China’s rise as a global economic powerhouse, the US should continue, as Secretary of State Antony Blinken has done, to accentuate diplomacy while reinforcing the idea of a relationship grounded upon a rules-based international order. The outcome should encompass a vision of an Asia and Western alliance where partnerships foster prosperity, freedom, and sustainability for all.