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05/09/2017

Demographics in Asia

Michael Auslin, a resident scholar at the American Enterprise Institute and the author of “The End of the Asian Century: War, Stagnation, and the Risks to the World’s Most Dynamic Region,” had an op-ed in the Wall Street Journal about two months ago and I’ve meaning been to quote his thoughts on the demographic crisis in Asia.

“Japan began losing population in 2011, after decades of dropping birthrates, according to World Bank data.  The country’s health and welfare ministry and other experts worry that the number of Japanese, which stood at 127 million in 2014, could fall by as much as a third by 2060.  One result of this failure to reproduce is that Japan, according to the U.N., ‘is home to the world’s most aged population,’ with 33% of its citizens 60 or over in 2015; the country is thought to have more than 58,000 centenarians.  No modernized society has ever faced such a challenge.

Japan’s demographic problems today could well become those of South Korea, Hong Kong, Taiwan and Singapore tomorrow.  The direst scenarios for South Korea’s population, for example, predict a drop from 50 million today to just 10 million in 2136, thanks to a low fertility rate of 1.19 children per woman.  As populations shrink, these countries will struggle to maintain their labor forces, stay competitive, fund entitlement programs and reshape their societies to deal with mostly elderly populations.

“China’s leaders have created another demographic problem through the Communist Party’s infamous one-child policy, promulgated in 1979.  Meant to control overpopulation, the policy has prevented as many as 400 million births, China’s government says.  Despite the loosening of Beijing’s draconian restrictions in 2015, China still projects that its population will begin to slide downward around 2030.

China’s one-child policy is already hurting the labor market.  In 2012, the total number of working-age Chinese dropped by some 3.4 million, according to China’s National Bureau of Statistics. Between 2012 and 2014, the labor force shrank by some 9.5 million, the bureau reported, and the steady flow of migrant workers into coastal manufacturing centers has begun to dry up. These trends will increasingly pressure the government itself to provide health care and other basic social services for elderly Chinese who, because of the one-child policy, don’t have large families to support them.

“At the opposite end of the demographic spectrum lie countries such as India and Indonesia. Much of South and Southeast Asia face the risk of too many people.  The U.N. predicts that India’s population will surpass China’s by 2022, turning the world’s largest democracy into the world’s most populous country.

“For governments, this youth boom means a growing demand for education, jobs, infrastructure and rising living standards.  Though having a surplus of young people might seem like an economic asset, most poor countries have failed to turn abundant labor pools into lasting prosperity.”

Hot Spots will return in a few weeks.

Brian Trumbore



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Hot Spots

05/09/2017

Demographics in Asia

Michael Auslin, a resident scholar at the American Enterprise Institute and the author of “The End of the Asian Century: War, Stagnation, and the Risks to the World’s Most Dynamic Region,” had an op-ed in the Wall Street Journal about two months ago and I’ve meaning been to quote his thoughts on the demographic crisis in Asia.

“Japan began losing population in 2011, after decades of dropping birthrates, according to World Bank data.  The country’s health and welfare ministry and other experts worry that the number of Japanese, which stood at 127 million in 2014, could fall by as much as a third by 2060.  One result of this failure to reproduce is that Japan, according to the U.N., ‘is home to the world’s most aged population,’ with 33% of its citizens 60 or over in 2015; the country is thought to have more than 58,000 centenarians.  No modernized society has ever faced such a challenge.

Japan’s demographic problems today could well become those of South Korea, Hong Kong, Taiwan and Singapore tomorrow.  The direst scenarios for South Korea’s population, for example, predict a drop from 50 million today to just 10 million in 2136, thanks to a low fertility rate of 1.19 children per woman.  As populations shrink, these countries will struggle to maintain their labor forces, stay competitive, fund entitlement programs and reshape their societies to deal with mostly elderly populations.

“China’s leaders have created another demographic problem through the Communist Party’s infamous one-child policy, promulgated in 1979.  Meant to control overpopulation, the policy has prevented as many as 400 million births, China’s government says.  Despite the loosening of Beijing’s draconian restrictions in 2015, China still projects that its population will begin to slide downward around 2030.

China’s one-child policy is already hurting the labor market.  In 2012, the total number of working-age Chinese dropped by some 3.4 million, according to China’s National Bureau of Statistics. Between 2012 and 2014, the labor force shrank by some 9.5 million, the bureau reported, and the steady flow of migrant workers into coastal manufacturing centers has begun to dry up. These trends will increasingly pressure the government itself to provide health care and other basic social services for elderly Chinese who, because of the one-child policy, don’t have large families to support them.

“At the opposite end of the demographic spectrum lie countries such as India and Indonesia. Much of South and Southeast Asia face the risk of too many people.  The U.N. predicts that India’s population will surpass China’s by 2022, turning the world’s largest democracy into the world’s most populous country.

“For governments, this youth boom means a growing demand for education, jobs, infrastructure and rising living standards.  Though having a surplus of young people might seem like an economic asset, most poor countries have failed to turn abundant labor pools into lasting prosperity.”

Hot Spots will return in a few weeks.

Brian Trumbore