China’s Twilight Years: The country’s population is aging and shrinking. That means big consequences for its economy—and America’s global standing.

“It really doesn’t matter what happens now with the fertility rate,” a demographer at the Chinese Academy of Social Sciences told me. “The old people of tomorrow are already here.” She predicted that in another decade or two, the social and fiscal pressures created by aging in China will force what many Chinese find inconceivable for the world’s most populous nation: a mounting need to attract immigrants. “When China is old, though, all the countries we could import workers from will also be old,” she said. “Where are we to get them from? Africa would be the only place, and I can’t imagine that.”

Copyright The Atlantic – June 2016

On opposite sides of the globe, two debates that will profoundly affect the future of the United States, and indeed the world, are raging. One of them has become shrilly public, while the other remains almost secret. On the surface they might seem to have little to do with each other, but at bottom, they are inextricably linked.

The first debate, which is unfolding in America, concerns immigration. Republicans like Donald Trump and Ted Cruz have staked out some of the more radical positions in this debate, such as urging that the U.S. build a wall to keep out illegal immigrants and that it deport the millions who are already here. The other debate, which is playing out in Beijing, is about how big a navy China should build, and how much it should contest America’s primacy in the world’s oceans.

To a degree scarcely suspected by most people, both debates—and more generally, America’s chances of maintaining its standing in the world—are bound up in the two countries’ sharply contrasting population dynamics.

Under President Xi Jinping, China has until very recently appeared to be a global juggernaut—hugely expanding its economic and political relations with Africa; building artificial islands in the South China Sea, an immense body of water that it now proclaims almost entirely its own; launching the Asian Infrastructure Investment Bank, with ambitions to rival the World Bank. The new bank is expected to support a Chinese initiative called One Belt, One Road, a collection of rail, road, and port projects designed to lash China to the rest of Asia and even Europe. Projects like these aim not only to boost China’s already formidable commercial power but also to restore the global centrality that Chinese consider their birthright.

As if this were not enough to worry the U.S., China has also showed interest in moving into America’s backyard. Easily the most dramatic symbol of this appetite is a Chinese billionaire’s plan to build across Nicaragua a canal that would dwarf the American-built Panama Canal. But this project is stalled, an apparent victim of recent stock-market crashes in China.

Many economists believe that these market plunges are early manifestations of a historic slowdown in the Chinese economy, one that is bringing the country’s soaring growth rates down to earth after three decades of expansion. But the current slowdown pales in comparison with a looming societal crisis: In the years ahead, as China’s Baby Boomers reach retirement age, the country will transition from having a relatively youthful population, and an abundant workforce, to a population with far fewer people in their productive prime.

The frightening scope of this decline is best expressed in numbers. China today boasts roughly five workers for every retiree. By 2040, this highly desirable ratio will have collapsed to about 1.6 to 1. From the start of this century to its midway point, the median age in China will go from under 30 to about 46, making China one of the older societies in the world. At the same time, the number of Chinese older than 65 is expected to rise from roughly 100 million in 2005 to more than 329 million in 2050—more than the combined populations of Germany, Japan, France, and Britain.

The consequences for China’s finances are profound. With more people now exiting the workforce than entering it, many Chinese economists say that demographics are already becoming a drag on growth. More immediately alarming are the fiscal costs of having far more elderly people and far fewer young people, starting with the expense of creating the country’s first modern national pension system.

Unlike residents of China’s prosperous eastern cities, hundreds of millions of peasants and migrant laborers have scant personal savings and rudimentary retirement coverage, if any. “One goal is to extend pension coverage to everyone,” says an economist with the Chinese Academy of Social Sciences, in Beijing. “But that will be very expensive, because most people haven’t paid anything into the system at all. Basically, what this means is a wealth transfer.” Providing health care to these same disadvantaged classes will also be vastly expensive.Mark L. Haas, a Duquesne University political scientist, has for some time warned of a looming contest between guns and canes—a variant on the old idea of guns versus butter—as the world’s major countries grapple with demographic change. “China’s political leaders beginning in roughly 2020 will be faced with a difficult choice: allow growing levels of poverty within an exploding elderly population, or provide the resources necessary to avoid this situation,” Haas writes in Political Demography. If China’s government decides in favor of the latter option, Haas argues, American power will benefit. More broadly, he foresees a coming “geriatric peace,” as nations around the world find themselves too burdened to challenge America’s military preeminence.

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Continental Shift: the rush to build Africa’s booming cities

Copyright Architectural Record

By Howard W. French

From the air, Juba, South Sudan, the capital of Africa’s newest country, looks like nothing so much as a giant village, sprawling brown, flat, and ragged from the banks of the White Nile. At first glance this might seem a most unlikely frontier for architects seeking new markets, but the closer one looks, the more this city begins to resemble a vast construction project waiting to happen.

I had been warned to carry a lot of cash with me here, because there were no international banks, much less functioning ATMs, from which to access funds. But wandering by foot “downtown” my first evening in the city, on a dusty side street I stumbled upon the gleaming local headquarters of Stanbic Bank, a subsidiary of South Africa’s Standard Bank and a major presence around the continent. When I inquired, the watchmen standing guard out front informed me that the large blue glass-and-metal structure had been inaugurated by the new nation’s president that very week.

This country may embody underdevelopment like few other places, but because it is swimming in oil wealth, lots of other banks will undoubtedly follow Stanbic’s example in the near future—and that is just for starters.

For the time being, South Sudan’s year-old government works out of a jumble of white buildings—half overgrown villas, half hastily built concrete blocks—at one end of the city’s main avenue, across the road from a national stadium that comprises little more than a pair of opposing bleachers and a forlorn dirt field. Someday, perhaps soon, these will be replaced by an administrative district that will give a fresh definition to this fast-growing city of 300,000 people. Who will design and build it remains an open question.

In large part because of its newness, South Sudan is an extreme example of a phenomenon taking place all over sub-Saharan Africa. Here, a combination of some of the world’s most vigorous economic growth—at least a dozen African economies have grown by 6 percent or more a year for six straight years—and the planet’s fastest urbanization rates are creating new cities and reshaping existing ones on a scale exceeded only by China. This phenomenon, which is likely to last at least until mid-century, is underpinned in equal parts by strong international demand for the continent’s immense mineral and hydrocarbon riches and by the rapid rise of new middle classes in one country after another.

But South Sudan is an extreme example in another sense, too. Whether the country will be able to harness its resources for the huge building boom that is so clearly needed will depend on whether it can reach a modus vivendi with Sudan, the country to the north from which it recently seceded—and, just as crucially, whether its leaders can keep corruption within reasonable limits.

High political risk—involving poor governance, weak rule of law, and corruption—is a problem in many African countries. Yet international players are increasingly attracted to the continent’s markets, including in the construction industry, because the demographic and economic fundamentals are so strong. By 2050, one in four working-age people in the world will be African, and 60 percent of the continent’s population will live in cities, compared with about 40 percent now, according to the United Nations. Because Africa’s overall population rate is zooming, there will be three times as many urban dwellers as there are today. Like people everywhere, a great many of them will demand to shop in modern malls, to stay in international-style hotels, and to live and work in modern buildings.

In the last two years, traveling widely around the continent while researching a book about China’s booming relations with Africa, I have seen glimpses of this emerging urban realm in city after city. New expressways deliver motorists to the hearts of fast-growing capitals like Windhoek, Namibia; Dakar, Senegal; and Bamako, Mali. Construction cranes crowd the skyline in cities as far-flung as Dar es Salaam, Tanzania; Lusaka, Zambia; Accra, Ghana; and Maputo, Mozambique.

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China’s ‘Demographic Tsunami’ Begins

I’ve been both reading and writing about this for years, and watched Japan enter demographic decline up close. For more thorough treatment, Vaclav Smil is a good read:

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This, meanwhile, is a good, basic journalistic introduction:

“Wang Fuchuan lies in bed wearing a quilted black jacket, with two comforters pulled up to his chin to keep out the chilly November air. The heating at Beijing Songtang Caring Hospice is broken and the 90-year-old’s nostrils are stuffed with toilet paper to stop them dripping.

Cockroaches scurry across the floor of his room, which has no running water or toilet. His possessions, a few articles of clothing, are in a plastic bag under his bed next to a pink wash bowl with a sliver of soap. His only entertainment is a transistor radio.

Wang counts himself lucky. While he has no family or savings, he fought against the Japanese and Kuomintang in the 1940s, so the government pays the clinic’s monthly fee of 2,000 yuan ($318). His 200-yuan pension buys food.

“A lot of people my age can’t afford to be here,” Wang says. “The food isn’t too good, but I have nothing else to complain about.”

Wang is in the vanguard of a looming demographic shift for China, Bloomberg Businessweek reports in its Jan. 9 issue. The latest government census shows 178 million Chinese were over 60 in 2009. That figure could reach 437 million — one third of the population — by 2050, the United Nations forecasts. While the elderly were looked after in the past by their children, urbanization and the nation’s one-child policy have eroded the tradition of family care.

“It’s a demographic tsunami,” says Joseph J. Christian, a fellow at the Asia Center at the Harvard Kennedy School, and former DLA Piper partner in Hong Kong, who specializes in senior housing issues in China. “The whole multi­generational housing model has disappeared.

” …

Please follow the link to continue: China’s Demographic Decline Begins