In reflecting on this article which suggests that India may become an industrial powerhouse rivaling China in that regard I stumbled across a few things that I thought you might find interesting. First, take a look at this table. China’s current population in the critical 20-49 demographic is an incredible 665 million people. But by 2025, just 15 years from now, that number will have decreased by nearly 70 million people to 597.9. The die is cast on that. Here’s a graphical illustration of what’s going on:
China has achieved quite a bit of its remarkable growth over the past 20 years or so, as Soviet Russia did, by moving relatively non-productive labor assets from agriculture to manufacturing. In order to maintain its growth China will need to continue that and it will become progressively harder to do for a host of reasons. Or it must import more food or both.
I touched on this some time ago in my post, Gray China. The question is still relevant: will China become old before it becomes rich?
This need not be a crisis: China has managed its affairs very cannily over the last generation or so and it may well weather this storm, too. But it’s not a done deal and may entail some difficult transitions for the Chinese people.
Before the immigrant wave of the late 19th century the United States used technology to replace unskilled labor. Per capita income was high.
then waves of workers came in and masss production increasingly replaced skilled labor. Real wages fell.
A surplus of cheaper labor in this country has driven real wages down for many in the last few decades.