China will eventually face an economic crisis

For decades, China has tried to solve its overpopulation problem via a one-child per couple policy that has indeed stabilized its population size at about 1.3 billion. This has resulted in the population aging over time. But at the same time, China has been encouraging more and more foreign businesses to outsource their manufacturing labor to China to take advantage of the vast amount of cheap labor there.

That will soon come to an end, because you cannot have it both ways for long. As population growth stops and eventually starts to decline, China will be forced to devote more economic resources to care for its elderly, which will grow in numbers at the expense of the younger workers. And Chinese workers will feel they are worth more and start organizing and even striking for better pay and work conditions, resulting in the era of cheap labor in China coming to an end.   Meanwhile….

http://geography.about.com/od/populationgeography/a/chinapopulation.htm

In the next few decades, India, the world’s second most populous country is expected to surpass China in population. By 2040, India’s population is expected to be 1.52 billion; that same year, China’s will be 1.45 billion and India will become the world’s most populous country. As of 2005, India has a total fertility rate of 2.8, well above replacement value, so it is growing much more quickly than China.

The result will most likely be a shift in outsourcing from China to India, at the very time China’s social and economic systems will be most dependent on the younger workers there to support welfare for the retired workers. So that will cause vast unemployment in China and poverty for all ages there, instead of the economic prosperity it has been striving for. We will see more and more products that say, “Made in India”,  “Made in India”, “Made in India”, “Made in India”, “Made in India”, “Made in India”, “Made in India”, “Made in India”, “Made in India”, “Made in India”, “Made in India”, “Made in India”, “Made in India”, “Made in India”. And India will suffer from both overpopulation and increased pollution that will dwarf what China is suffering now.

Poor China! It would have been better not to have accepted the outsourcing in the first  place!

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One thought on “China will eventually face an economic crisis

  1. Pingback: An Open Letter to the American People | Dale Husband's Intellectual Rants

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