Thursday, May 26, 2011

Market declines, inflation...

...lower (real) GDP forecasts, etc. And now, the world is focusing in on the demographic "challenges" the paper dragon faces.

This article is as good as any in levelling a healthy degree of skepticism regarding the Paper Dragon's prospects and global ambitions.

A snippet:

According to a United Nations forecast in 2008, the over-60 and over-65 age groups in China were expected to account for 12.3% and 8.2% of the population respectively in 2010, against 7.5% and 4.9% in India.

The new census demonstrates, however, that China’s population is aging even faster than expected. According to the survey, over-60 and over-65 make up 13.26% and 8.87% of the population.

The new Census also revealed that the imbalance between the ratio of boys to girls is also still increasing. The sex ratio in 2010 was 118.06, which is 1.2% more than 2000.

Based on the data of the 2000 census as well as the new census, China’s comprehensive national strength, from the viewpoint of its demographic structure, is currently at a historical peak. The working-age group of those 15-64 years, has reached almost 1 billion people, an all-time high, with the elderly dependency ratio less than 12%, and the general elderly dependency (ratio of the non-labor population to labor population) only 34%. In other words, China has never been less burdened by a non-labor population.

But again from the viewpoint of the demographical structure, China is set to repeat Japan’s economic recession experience of the 1990s. The difference is Japan became rich before growing old, while China is growing old before even getting rich. The average GDP of Japan today is above $40,000, while it is still just $4,000 in China.

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