Chinese degrowth teaches us a lot, and it’s not a catastrophe

Chinese degrowth teaches us a lot, and it’s not a catastrophe

The West seems to have suddenly discovered the decline of the Chinese population. He does it with catastrophic tones and above all with a lot of Schadenfreude, a German term that indicates the subtle joy in the misfortune of others. But this development did not come suddenly, it had been foreseen for some time. Not a problem unique to China, the vast majority of Western countries are aware of this to some extent, as are several Asian nations led by Japan.

On the other hand, China has a greater rapidity of the phenomenon and the fact that it invests a much larger population than the Japanese or Italian. Not necessarily a catastrophe, although there are some unknowns to be considered in the degrowth + authoritarian regime mix.
I’ll start with the figures, taken from official sources and published by the Chinese equivalent of our Istat. From 2021 to 2022, the number of births fell from 10.62 million to 9.56 million. In the same period, the number of deaths (probably also from Covid) rose from 10.14 to 10.41 million. As a result, the population was reduced by 850,000; the Chinese have gone from 1 billion and 413 million to 1 billion and 412 million. There are still quite a few left, so hearing terms like depopulation will make you chuckle.

From the point of view of world balances, one consequence concerns the confrontation between China and India. With the Indian elephant already practically the size of the Chinese dragon, the UN predicts this will be the year when Delhi overtakes Beijing. I will come back to the opportunities this presents for India with the largest and youngest workforce in the world. I would like to remind you that these subjects were already well known when I wrote The Empire of Cindia (2006) and The Indian Hope (2007), almost twenty years ago. The Chinese degrowth turnaround is an event that has been heralded, albeit a little earlier than expected.

The Beijing government expected deaths to surpass births by 2030, and Covid likely played a key role in bringing that milestone forward by seven years. Also the historical antecedents have been known and analyzed for years, but I remember them. At a time when even the West was obsessed with the demographic bombshell (We are too many, the planet will never destroy us was the politically correct dogma of the 1970s, when we were four billion instead of eight today), China put on one strict and even wild birth control policy. I write that he converted because, during the reign of Mao Zedong, he was bound by another dogma of the 19th and early 20th centuries: Many peoples make many armies. Mao wanted the Chinese to grow and multiply even as he decimated them through famines caused by his criminal blunders, or through vicious purges and civil wars like the Cultural Revolution.

When Mao died, his successor Deng Xiaoping promulgated the one-child rule in the late 1970s. Enforcement was cruel and even imposed forced abortions. China has managed to tame a baby boom that would have given it a few hundred million more mouths to feed had it not been for these policies. In a way, it can be argued that the one-child policy — with all the abuse and pain it caused — contributed to post-Mao political stability and the economic miracle. The one-child rule proved too successful, leading China to undergo demographic change at a rapid pace. Degrowth has been on the radar screens for at least twenty years.

In recent years, Xi Jinping has tried to remedy the situation with various course corrections: First he brought the number of children allowed to two, then to three, and finally he even introduced incentives and support for young mothers. But now mentalities have changed. Young Chinese girls – and their husbands too – see the child as a burden, an economic price that affects their careers or quality of life. Customs and values ​​have been partially westernized. In the somewhat hasty analyzes and comments of the last few days, the decline in the Chinese birth rate is attributed to the sexism of this society, the overburdening of women with tasks, as well as the scarce availability of services and rights (kindergartens, maternity leave , welfare subsidies), exacerbated by the high cost of quality education.

All true, but none of it seems exotic: these are problems that plague many Western nations, problems that have sometimes been partially and costly answered with pro-birth policies in France or Sweden, but without really changing developments significantly. The fashionable apocalypse of the 1970s, when we should have starved because we were too many, has given way to bleak scenarios of depopulation, human deserts. In any case, China is no exception, just bigger than us. The Chinese specifics that have been talked about these days often concern that nation’s role in the world economy. For thirty years the People’s Republic was the planet’s factory, and more recently it has also become the planet’s market. There is no doubt that depopulation will help reduce China’s weight in the world by reducing both the labor force and the number of consumers. Hence the glee when we hope to get rid of a pachyderm that causes us many problems.

However, it must be remembered that the Chinese are studying demographic changes in other countries – Japan at the forefront – in search of imitative models. After Japan, for example, major Chinese companies have long invested in automation, robotics, and artificial intelligence to prepare for a future of ever-scarcer labor. Xi Jinping has long theorized the shift from an export-driven to a domestic-demand-driven economy: this too includes the downsizing scenario. The fear of growing old before you get rich, which I heard in Beijing twenty years ago, describes the difficulty of building a modern (and therefore expensive) welfare system when average per capita income is still far below that of the so advanced nations lies USA, Japan or Western Europe.

Another problem, more anthropological and cultural than economic, concerns the mutation of an aging society: it often tends to become less innovative. To boost productivity and innovation, Xi must stop punishing private companies. About the geopolitical implications for the rest of the world. Here the concerns are justified. An aging society, governed by a democratic political system, tends to withdraw, become more cautious, even renounce, adopting a pessimistic and defeatist vision of the future. Let’s look in the mirror: the syndrome of decadence as we experience it in many western environments. But an aging society within an authoritarian regime – see Russia – can go the opposite way, and that is aggressive and paranoid nationalism. China adds a potentially destabilizing element: the numerical preponderance of young men over young women creates an army of single men, often a recipe for political instability or war. All of this combined may make plausible a scenario recently picked up by Western publications: the notion that China’s period of explosive rise is already over, that Xi and the communist nomenclature must now rush to consolidate their country’s global power and decline become too visible. For example, in a nutshell: better invade Taiwan while we’re still at the peak, before the downward spiral begins. These are working hypotheses that are useful to discuss. Provided that the premise I started from is kept in mind. Demographics are slow moving, they don’t upset a country overnight; China is following a trend that many other nations are well on the way to.

Jan 19, 2023 5:41 pm – edit Jan 19, 2023 | 5:41 p.m