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Sigh, this really doesn’t matter

Unless we’re in a dick measuring contest this just doesn’t matter:

Why China’s best days are already behind it
A shrinking population pushes Beijing on course for a future of ‘pedestrian’ growth

Size doesn’t matter.

Size per person defines living standards so is indeed important. As with dicks, in a way – 10 inch isn’t interesting if the average woman is 8 for the cervix is not known as an erogenous zone.

Working away from the analogy there a bit, GDP per capita is important, GDP is not.

To illustrate, the Indian economy grew at 4% a year for decades. We in Britain, in fact in any industrialised country, would have loved to have that. Unfortunately for India the population also grew at 4% a year over those decades. GDP per capita hardly budged. This is called Malthusian growth in techspeak. Not wholly desirable.

China grew at 6 and 8 and 10%, depending upon how much we believe the stats of a communist dictatorship (and yes they’re faked, but not that badly). Population grew less than that. So, GDP per capita rose and rose strongly – the greatest reduction of absolute poverty in the history of the human race. Per capita China moved from about equal with England in 1600 to about equal with England in 1950, 1960, and managed that in only 40 years.

So, what next? China’s GDP grows at a lower rate. Say, 4 or 5%. But China’s population starts shrinking? So, growth in GDP per capita is 5 or 6%. That’s a glorious rate.

Sure, there are minor problems within that, the Ponzi scheme of there always being more youngsters to pay for the old starts to fail. But that’s a distributional issue within that still great overall situation. Oh, and China’s health care and pensions problems, well, given that they’re near entirely based upon private savings not unprovided for national government promises that’s not as much of a problem as it might seem.

4 thoughts on “Sigh, this really doesn’t matter”

  1. ‘Twill be interesting to see how that turns out, Tim. I’d argue that the economy might tend to falter if it gets choked up with too many white haired old bastards like me.

    Of course the entertaining question will be whether I live long enough to see what really happens.

  2. Yeah, but Shirley the working population decreases. There may be fewer mouths to feed but there are also fewer hands to feed the mouths.

    Will China have the same problem as the West, where increased general affluence means that there are fewer available natives to do the menial jobs ?

    OK with a population the size of China’s and the untapped resources of parts of the country, this may be a long way off, but possibly only a few generations.

  3. As recently as a decade ago demographers were saying that China’s population would peak and start to decline some time around the middle of this century. Instead it’s happened a generation ahead of that schedule.

    So, filling up with “white haired old bastards”, not to mention being led by them, does this make China more dangerous, especially regarding Taiwan? Will Xi, knocking on the door of 70, expect that it’s now or never. Does someone who’s always been a vicious thug get meaner right after their strength has peaked but they can still thump pretty good?

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