What if China never exceeds the US as a global power?
- Demographic trends in coming decades favour the United States but not China, but falling into the ‘middle-income trap’ may yet mean escaping the so-called Thucydides’ trap
American politicians fret about China becoming a bigger threat than the former Soviet Union. Fuelling their paranoia, many Chinese gloat about the inexorable rise of their country.
One thing you may notice is that such individuals in both nations almost never mention the respective demographics of the two countries. While the rise, decline and fall of nations depend on many factors, population growth and decline inevitably play a big role.
In that sense, studying the population and labour projections of China and the United States may be far more enlightening than reading the erudite predictions of nationalistic pundits and politicians in the two countries
To cut a long story short, the demographics are generally favourable to the US and quite bad for China, in terms of population growth and ageing. That’s the case not only relative to China, but to most other major economies today, according to a new study in Foreign Affairs.
Under such a scenario, Beijing may have to entertain Plan B or C, under which the next 80 years may still be another American Century and switch to a more accommodating posture.
The recently revised “Demographic Turning Points for the United States: Population Projections for 2020 to 2060” published by the US Census Bureau makes interesting reading.
The natural population trends – those born in the US – may be ageing as fast as many countries, but immigration will take care of population growth, a steady supply of young and abled workers and therefore economic expansion.
The census report said: “Despite slowing population growth, particularly after 2030, the US population is still expected to grow by 79 million people by 2060, crossing the 400 million threshold in 2058. This continued growth sets the United States apart from other developed countries, whose populations are expected to barely increase or actually contract in coming decades …
“Immigration is projected to overtake natural increase (the excess of births over deaths) as the primary driver of population growth for the country … Net international migration is projected to overtake natural increase, even as levels of migration are projected to remain relatively flat.”
In this sense, the anti-immigrant policy of the Trump administration and the general xenophobia of American right-wingers are either futile or counterproductive.
Meanwhile, like many other countries, China faces a dire demographic outlook. When the Chinese Academy of Social Sciences first published the “Green Book of Population and Labour” in January last year, it made a news splash because of the dire warning it contained about population decline and a shrinking labour force.
While many major economies experience declining birth rates and increasing life expectancies, China’s former “one child” policy had worsened those trends. Its birth rate fell in each of the last three years, despite allowing families to have two children from 2016. A population contraction may start by 2027. By the middle of the century, there will not be enough workers to support a vast and ageing population.
Writing in Foreign Affairs, Michael Beckley, a political scientist at Tufts University, observes that the US is unique among major countries to be able to expect a growing population, an expanding labour supply and an enlarging economy for the rest of the century.
He wrote: “Most countries’ populations are growing older, many at extremely fast rates. By 2070, the median age of the world’s population will have doubled compared with 100 years earlier, from 20 years old to 40 years old, and the share of people aged 65 and older in the global population will have nearly quadrupled, from 5 per cent to 19 per cent. For millennia, young people have vastly outnumbered the elderly. But in 2018, for the first time ever, there were more people over the age of 64 than under six.
“The United States will soon be the only country with a large, growing market. Among the world’s 20 largest economies, only Australia, Canada, and the United States will have growing populations of adults aged 20 to 49 throughout the next 50 years.
“The other large economies will suffer, on average, a 16 per cent decline in that critical age group, with most of the demographic decline concentrated among the world’s most powerful economic players. China, for example, will lose 225 million young workers and consumers aged 20 to 49, a whopping 36 per cent of its current total.
“Japan’s population of 20- to 49-year-olds will shrink by 42 per cent, Russia’s by 23 per cent, and Germany’s by 17 per cent. India’s will grow until 2040 and then decline rapidly.
“Meanwhile, the United States’ will expand by 10 per cent. The American market is already as large as that of the next five countries combined, and the United States depends less on foreign trade and investment than almost any other country. As other major economies shrivel, the United States will become even more central to global growth …”
Of course, this is just one prediction. China may yet fulfil its hegemonic ambitions to exceed the US and make this the Chinese Century. Maybe the US will shut out immigration and turn completely inward and xenophobic. But as China’s leaders pride themselves on their pragmatism and political realism, they must already be planning ahead.
Actually, there are worse scenarios for China than falling into the “middle-income trap”. For one thing, it may escape the so-called Thucydides’ trap – or a third world war – as Beijing realises it’s unrealistic and counterproductive to compete with the US for world dominance. Since the late 1970s, China has been able to pay for both guns and butter because of its phenomenal economic expansion. At some point in the coming decades, it may have to choose butter over guns and scale back its global ambitions. God forbid if it chooses guns over butter – just to challenge the US!
But as US baseball legend Yogi Berra used to say, “Prediction is very hard, particularly when it’s about the future.”