The population bust
- Details
- Category: Opinion
- 27 Aug 2014
- Written by The BusinessMirror Editorial
THERE is something in our culture that helps us avoid planning for the longer term. This quality manifests itself in many diverse ways. “Preventive maintenance” usually means knowing what part to buy when the machine breaks down. The worst case is the one like the Metro Rail Transit Line 3, where preventive maintenance means thinking about knowing eventually which part to buy.
But thinking about and planning for the future can be critical if a nation does not want to be overtaken by events that get completely out of control.
The age demographic of a country today is vitally important to its future tomorrow. The best situation would probably be for a nation to reach an ideal population size and then to balance the birth and death rate. But this sort of social engineering is difficult, at best, and often has unintended consequences.
During the leadership of Mao Zedong, there were massive changes in Chinese demographics. The crude birth rate fell from 37 per 1,000 to 20. Infant mortality dropped from 227 per 1,000 in 1949 to 53 per 1,000 in 1981. Life expectancy increased from 35 years to 66 in 1976.
But along the way, the Chinese government bought into the idea of a global overpopulation disaster, even as its own birth rate was declining. In 1979 the one-child policy was implemented and was estimated to have averted some 200 million births.
However, the unintended consequence is that, in 2030—only 16 years from now—China’s population will begin to shrink and grow much older. Even now, there are about 20 million Chinese males who will never find a wife and raise a family because there are not enough women.
China announced the decision to further relax its one-child policy last November. Under the new policy, families can have two children if one parent is an only child. This aims to stop the demographic disaster of the decades-long drop in the number of births. However, it is a failure, as less than 3 percent of the 11 million Chinese couples eligible for another child applied for permission by the end of May.
Some of the consequences by 2030 will be higher wages, as there will be a smaller labor force. Other economic results include less demand for all types of goods and services, as it is the younger people who spend big money, not the old folks.
The Philippines will hit the age demographic “sweet spot” with majority of Filipinos in the working-age group in 2045. Asia will be changed dramatically in the next 25 years.
The infamous "one-child" policy in China is being relaxed but social engineering continues to be difficult. Although the Chinese government is allowing single child parents to have two children because of a rapidly aging population, only 3% of China's eligible population has applied for permission. This is probably due to increased cost of living and more females in the workforce.
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