Demographics And Economics: We Haven’t Even Had The Debate

Business, China, Company Strategy, Economics, Japan, Oil & Gas, US

GlobalInflation

By John Richardson

JAPAN has seen two decades of deflation and rising debts. Everyone should now recognise that Abenomics have failed to resolve this crisis. Abenomics were always going to fail because you cannot print babies.

What a pity that Western central bank chiefs didn’t take a long hard look at Japan years ago. Instead they also have attempted to print babies.

Round and round in circles we will continue to go – downward spiralling circles of worsening debt and deflation – until or unless people recognise that demographics are economic destiny.

It is not just in the West where demographics are destiny. In China, too, the ageing of its population is a major challenge. This largely explains why the global economy, in effect, has been taken off life support as China withdraws economic stimulus. China must find a new growth model – not one driven by the wrong kind of past investment – if it is to escape its middle income trap.

It is not that we have had an open to debate about this subject and that there are two different well thought-out points of view.

You don’t get Western central bankers and politicians coming to the debating table with mountains of data to refute the argument that the global decline in birth rates has resulted in a global demand deficit. This is the opposite of the 1960-1980s when an excess of demand and shortage of supply created major inflationary pressures.

No. Instead if you spend hours reading everything you can get your hands on, and talking to as many people as possible, as I do, demographics are barely mentioned.

Perhaps I have missed something. Buried in the electronic archives of one of the central banks, or some economic research institute, there might be a treasure trove of carefully thought out research that blows a hole in our argument about demographics. I would love to see this research.

I worry that this kind of research doesn’t exist – and that instead Western central bankers, politicians and chemicals company CEOs have taken what in effect is an intellectual short cut. They have either dismissed the issue of demographics without giving it the analysis it deserves. Either that or they have missed this issue altogether.

The trouble is we are rapidly running out of time, as the chart above firmly indicates. Chemicals company CEOS need to get up to speed about what this means.

PREVIOUS POST

China's Yuan: Making Sense Of All The Noise

17/02/2016

By John Richardson LAST year nearly $1trn was moved out of China as rich people ...

Learn more
NEXT POST

Investors Mislead US On Oil Versus Natural Gas

22/02/2016

By John Richardson DID you raise the right concerns during board meetings before...

Learn more
More posts
Global polyethylene oversupply, the highest in 19 years, hasn’t gone away
03/07/2020

By John Richardson BRENT crude futures surged by 80% during the second quarter and enjoyed their bes...

Read
China could be in complete polypropylene self-sufficiency by 2022
28/06/2020

By John Richardson SORRY to labour the point but this comes from a genuine concern for the readers o...

Read
Asian polyethylene price recovery faces multiple challenges
25/06/2020

By John Richardson THERE are reports of significant cuts in Middle East polyethylene (PE) operating ...

Read
China’s long-term ambition for paraxylene self-sufficiency seems close to being realised
21/06/2020

On Friday, I examined how China’s paraxylene (PX) net imports could fall to as little 8m tonne...

Read
China’s big declines in 2020 PX and PP imports: the impact on its major trading partners
18/06/2020

By John Richardson CHINA’S refineries and petrochemicals plants came roaring back to almost fu...

Read
Paraxylene demand collapses as higher China production threatens 6m tonne fall in imports
15/06/2020

By John Richardson DON’T SAY I didn’t tell you that a decline in stock markets would happen. The...

Read
Coronavirus will severely damage the developing world unless we take the right steps
12/06/2020

By John Richardson IT IS a fantastic achievement. “Over the last 25 years, more than a billion peo...

Read
Main Street versus Wall Street and the crisis in the developing world
10/06/2020

By John Richardson RISING equity and oil markets do not necessarily point to a V-shaped recovery. I ...

Read

Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more

Analytics

Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more
X

Uncover exclusive industry upates from ICIS

Interested to uncover more articles related to this topic? Explore additional news, insights and intelligence, tailored to the markets you are interested in by accessing exclusive content from ICIS.com

DISCOVER MORE