From: lessgovt@gmail.com   
      
   Why China’s Shrinking Population Is a Problem for Everyone   
   By Nicole Hong, April 19, 2023, New York Times   
   Despite the rollback of China’s one-child policy, and even after more recent   
   incentives urging families to have more children, China’s population is   
   steadily shrinking — a momentous shift that will soon leave India as the   
   world’s most-populous    
   nation and have broad rippling effects both domestically and globally.   
      
   The change puts China on the same course of both aging and shrinking as many   
   of its neighbors in Asia, but its path will have outsize effects not just on   
   the regional economy, but on the world at large as well.   
   Here’s why economists and others are alarmed by the developments:   
   1. China’s shrinking work force could hobble the global economy.   
   For years, China’s massive working-age population powered the global   
   economic engine, supplying the factory workers whose cheap labor produced   
   goods that were exported around the world.   
      
   In the long run, a shortage of factory workers in China — driven by a   
   better-educated work force and a shrinking population of young people —   
   could raise costs for consumers outside China, potentially exacerbating   
   inflation in countries like the    
   United States that rely heavily on imported Chinese products. Facing rising   
   labor costs in China, many companies have already begun shifting their   
   manufacturing operations to lower-paying countries like Vietnam and Mexico.   
      
   A shrinking population could also mean a decline in spending by Chinese   
   consumers, threatening global brands dependent on sales of products to China,   
   from Apple smartphones to Nike sneakers.   
      
   2. The data is bad news for China’s crucial housing market.   
   In the short term, a plunging birthrate poses a major threat to China’s real   
   estate sector, which accounts for roughly a quarter of the country’s   
   economic output. Population growth is a key driver of housing demand, and   
   homeownership is the most    
   important asset for many Chinese people. During widespread pandemic lockdowns   
   that dampened consumer spending and export growth, China’s economy became   
   even more dependent on the ailing housing sector.   
      
   The government recently intervened to help distressed real estate developers,   
   in an attempt to stem the fallout from its housing crisis.   
      
   3. China’s shrinking work force may not be able to support its growing,   
   aging population.   
   With fewer working-age people in the long run, the government could struggle   
   to sustain an enormous population that is growing older and living longer. A   
   2019 report by the Chinese Academy of Social Sciences predicted that the   
   country’s main pension    
   fund would run out of money by 2035, in part because of the shrinking work   
   force.   
      
   Economists have compared China’s demographic crisis to the one that stalled   
   Japan’s economic boom in the 1990s.   
      
   But China does not have the same resources as a country like Japan to provide   
   a safety net for its aging population. Its households live on much lower   
   incomes on average than in the U.S. and elsewhere. Many older Chinese   
   residents rely on state pension    
   payments as a key source of income during retirement.   
      
   China also has some of the lowest retirement ages in the world, with most   
   workers retiring by 60. The situation has put a tremendous strain not only on   
   state pension funds, but also on the country’s hospital system.   
      
   4. The crisis has been decades in the making.   
   China introduced the one-child policy in the late 1970s, arguing that it was   
   necessary to keep population growth from reaching unsustainable levels. The   
   government imposed onerous fines on most couples who had more than one child,   
   and compelled hundreds    
   of millions of Chinese women to have abortions. Many families favored boys   
   over girls, often aborting baby girls or abandoning them at birth, resulting   
   in a huge surplus of single men in the Chinese population.   
      
   China announced the relaxing of the family size restrictions in 2013, but many   
   demographic experts said the change had come too late to change the   
   country’s population trajectory.   
      
   5. There are no easy fixes.   
   The government’s efforts to start a baby boom to solve the demographic   
   crisis — including offering cash handouts and easing the one-child policy to   
   allow for three — have failed to stabilize falling birthrates. Educated   
   Chinese women are    
   increasingly delaying marriage and choosing not to have children, deterred by   
   the high costs of housing and education.   
      
   China has also been unwilling to loosen immigration rules to boost the   
   population, and has historically issued relatively few green cards to   
   replenish its shrinking work force.   
      
   To address the labor shortage, China has been outsourcing low-skilled   
   production to other countries in Asia, and adding more automation to its   
   factories, hoping to rely more on artificial intelligence and technology   
   sectors for future growth.   
   https://www.nytimes.com/2023/04/19/world/asia/china-population-india.html   
      
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