San Diego Union-Tribune (Sunday)
SHOULD CHINA’S SHRINKING POPULATION BE AN ECONOMIC CAUSE FOR ALARM IN THE U.S.?
San Diego Institute for Economic Research
UC San Diego School of Global Policy and Strategy
University of San Diego
UC San Diego
NO
While a considerable problem for China, there is little reason for the U.S. and other nations to be overly concerned. Centrally planned economies inevitably result in malfunctioning inefficiencies sapping out vitality. Many other nations’ labor forces are more than eager to take up the slack of production, while greater efficiencies from enhanced technologies and automation already make mass labor numbers less critical. Competing forces will lead to significant economic advancements resulting in much improved capacities.
NO
China’s population is shrinking gradually, so the effect on global economic activity in any given year will be small. Slower growth in China from a diminished workforce can even be good for the U.S. It makes it easier for the U.S. to remain the world’s largest economy, which will ease geopolitical tensions. Fewer people in the world also puts less pressure on global resources, reducing pricing pressures and limiting environmental damage.
YES
China’s decreasing population will cause wages to increase, which will increase inflation in the U.S. The importing of low-cost items from China has helped moderate inflation over the last few decades. The Chinese market may also be affected, but a large part of that has not been tapped yet. China’s population decrease will not be unique, as more than half of all countries have a fertility rate below the replacement rate, including the U.S., almost all of western Europe, and many countries in Asia.
YES
This will bring a slowdown in China’s economic growth that coincides with Xi Jinping’s ambitions for growing world dominance. That’s a potentially dangerous combination. Authoritarian rulers often become more aggressive and reckless in military decisions to compensate for economic weakness at home. Dealing with the current regimes in China, Russia and Iran calls for great discernment and wisdom by the leaders of the United States and Western democracies.
San Diego County Taxpayers Assoc.
Franklin Revere
Weave Growth
Scripps Health
YES
But don’t just take my word or my fellow panelists’ words on this. Plenty of talking heads and scholars talk about how a number of trends, including population growth, make this decade one that is very dangerous and a potential tinderbox for war between our two nations. Just ask the Google gods about a guy named Andrew Erickson (an old prof of mine) and look at his argument about the decade of maximum danger.
NO
It’s something to watch and monitor but not be alarmed by at this time. We are a global economy so the U.S. will feel the effects of China’s shrinking population. To mitigate any effects, the U.S. should continue returning manufacturing capabilities to the U.S. as relying on countries like China can lead to supply chain issues, trade and investment disruptions, and higher manufacturing costs. Manufacturing used to be one of America’s strengths and now it’s more of a weakness that is concerning for our national security and economic stability.
NO
China’s one-child policy has caused a rapidly aging population, sexual imbalance, and a growing middle class less willing to perform manual labor. The long-term implications will increase the price of goods manufactured in China, pushing low-skilled jobs to other countries. But alarm seems harsh. Ultimately, we must grapple with the reality that countries cannot always grow out of economic problems (e.g. pensions and health systems) and embark on new models.
NO
In one way, this might be an opportunity rather than a threat. Moving the manufacturing of products to Mexico and countries in Central and South America could be an opportunity to benefit their economies. However, there is the concern that potential reduced demand in China for U.S. products and services may impact us, as China is America’s third largest export partner, behind Canada and Mexico.