07 April 2011 16:26 [Source: ICIS news]
By Joe Kamalick
WASHINGTON (ICIS)--China is on the verge of a major population dip that could topple its economy within a few years, a US demographic authority argues, warning that US chemical companies and other manufactures should avoid capital investments in the Middle Kingdom.
Demographer Kenneth Gronbach says that ?xml:namespace>
In what amounts to a reversal of the sort of “baby boom” that fuelled US and European economic expansion in the post-World War II years, China has engineered a “baby doom”, a deliberate and often brutal reduction in its birth rate.
Particularly in the US, the baby boom of 1946-1964 produced a population surge that generated a flood of workers and consumers who in turn drove the nation’s post-war growth, creating demand for housing, products, education and services at an unprecedented pace.
In China’s post-Mao period, it is as if that US population line graph has been turned upside-down. The giant nation has created what might be called a generation-long population vacuum, a vacuum that now might well suck the air out of what so far has been spectacular Chinese economic growth.
The policy was aimed at countering what Chinese leaders at the time feared would be major complications of over-population, including burgeoning urban slums, epidemics, overwhelmed health, education and law enforcement services and perhaps food shortages, even famine - all of which could destabilise or bring down the central government.
Because adult children remain the principal source of support for elderly parents, many Chinese couples that started families in the 1980s and later wanted to have a male as their one allowed child, with the expectation that a son would more likely be able to support them in their old age.
Over the past 30 years, the one-child policy has been implicated in a sharp increase in forced abortions and widespread female infanticide, with the result that
Gronbach, who lectures widely in the US and elsewhere on the influence of demographics on business, noted that “In the 1960s and 1970s China was having 40m babies annually, but that birth rate has now fallen to close to 10m per year”.
According to the CIA World Factbook,
As a consequence of the one-child policy, Gronbach says,
“The issue is that it will be the responsibility now of those 30 and under in
“The 30-somethings will have to do the majority of China’s production, consumption and tax paying, and when you have a 75% reduction in the group that is chiefly responsible for those activities, you’ve got a real problem,” he said.
Gronbach said that
“So what is
Citing the Chinese government’s policy of condoning decades of abortion and infanticide, he said that the
But even such draconian measures will not help much, he said.
“In the next 10 to 15 years, I think
“They will experience a labour shortage that will tighten their production capacity,” Gronbach said.
The generation of 30-something Chinese males may be reduced even further, he argues, because there could well be a marriage migration.
He said the gender imbalance brought on by the one-child policy and its lowering of female births over the past three decades means that there are 20m to 30m young Chinese men of marriage age who will not be able to find wives in China, and many will leave for other areas of Asia.
All of this could have profound impact on
“If you are going to do business in
He said that parallel population problems are facing other Asian nations, especially
In contrast, Gronbach said, North and South America and especially the
He said he foresees manufacturing returning to the
“I think you will see immigration and capital inflow to the
“We have the largest crop of young and sophisticated workers in the history of this country, and when the
“My advice to the
Paul Hodges studies key influencers shaping the chemical industry in Chemicals and the Economy
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