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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Not Fade Away: The Myth of American Decline

Copyright The New Republic

Is the United States in decline, as so many seem to believe these days? Or are Americans in danger of committing pre-emptive superpower suicide out of a misplaced fear of their own declining power? A great deal depends on the answer to these questions. The present world order—characterized by an unprecedented number of democratic nations; a greater global prosperity, even with the current crisis, than the world has ever known; and a long peace among great powers—reflects American principles and preferences, and was built and preserved by American power in all its political, economic, and military dimensions. If American power declines, this world order will decline with it. It will be replaced by some other kind of order, reflecting the desires and the qualities of other world powers. Or perhaps it will simply collapse, as the European world order collapsed in the first half of the twentieth century. The belief, held by many, that even with diminished American power “the underlying foundations of the liberal international order will survive and thrive,” as the political scientist G. John Ikenberry has argued, is a pleasant illusion. American decline, if it is real, will mean a different world for everyone.

But how real is it? Much of the commentary on American decline these days rests on rather loose analysis, on impressions that the United States has lost its way, that it has abandoned the virtues that made it successful in the past, that it lacks the will to address the problems it faces. Americans look at other nations whose economies are now in better shape than their own, and seem to have the dynamism that America once had, and they lament, as in the title of Thomas Friedman’s latest book, that “that used to be us.”

The perception of decline today is certainly understandable, given the dismal economic situation since 2008 and the nation’s large fiscal deficits, which, combined with the continuing growth of the Chinese, Indian, Brazilian, Turkish, and other economies, seem to portend a significant and irreversible shift in global economic power. Some of the pessimism is also due to the belief that the United States has lost favor, and therefore influence, in much of the world, because of its various responses to the attacks of September 11. The detainment facilities at Guantánamo, the use of torture against suspected terrorists, and the widely condemned invasion of Iraq in 2003 have all tarnished the American “brand” and put a dent in America’s “soft power”—its ability to attract others to its point of view. There have been the difficult wars in Iraq and Afghanistan, which many argue proved the limits of military power, stretched the United States beyond its capacities, and weakened the nation at its core. Some compare the United States to the British Empire at the end of the nineteenth century, with the Iraq and Afghanistan wars serving as the equivalent of Britain’s difficult and demoralizing Boer War.

With this broad perception of decline as the backdrop, every failure of the United States to get its way in the world tends to reinforce the impression. Arabs and Israelis refuse to make peace, despite American entreaties. Iran and North Korea defy American demands that they cease their nuclear weapons programs. China refuses to let its currency rise. Ferment in the Arab world spins out of America’s control. Every day, it seems, brings more evidence that the time has passed when the United States could lead the world and get others to do its bidding.

Powerful as this sense of decline may be, however, it deserves a more rigorous examination. Measuring changes in a nation’s relative power is a tricky business, but there are some basic indicators: the size and the influence of its economy relative to that of other powers; the magnitude of military power compared with that of potential adversaries; the degree of political influence it wields in the international system—all of which make up what the Chinese call “comprehensive national power.” And there is the matter of time. Judgments based on only a few years’ evidence are problematic. A great power’s decline is the product of fundamental changes in the international distribution of various forms of power that usually occur over longer stretches of time. Great powers rarely decline suddenly. A war may bring them down, but even that is usually a symptom, and a culmination, of a longer process.

The decline of the British Empire, for instance, occurred over several decades. In 1870, the British share of global manufacturing was over 30 percent. In 1900, it was 20 percent. By 1910, it was under 15 percent—well below the rising United States, which had climbed over the same period from more than 20 percent to more than 25 percent; and also less than Germany, which had lagged far behind Britain throughout the nineteenth century but had caught and surpassed it in the first decade of the twentieth century. Over the course of that period, the British navy went from unchallenged master of the seas to sharing control of the oceans with rising naval powers. In 1883, Britain possessed more battleships than all the other powers combined. By 1897, its dominance had been eclipsed. British officials considered their navy “completely outclassed” in the Western hemisphere by the United States, in East Asia by Japan, and even close to home by the combined navies of Russia and France—and that was before the threatening growth of the German navy. These were clear-cut, measurable, steady declines in two of the most important measures of power over the course of a half-century.

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