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Pair-O-Graphs: China’s low birth-rate equals demographic headwinds

Scott Tong Jun 7, 2012

Today on Marketplace we reported on China cutting interest rates, to boost its economy short-term. But here’s a longer-term problem: China will soon start to age rapidly.



When I was posted in China as a Marketplace bureau chief, a cabbie once asked me, “How do Americans celebrate Chinese New Year?” I blinked several times. They think it’s all about them, the way we think it’s all about us. If you listen to the echo chamber, Americans assume Beijing’s policies emanate from the Ministry of World Domination. In fact, like most countries they have their own problems in-house. Today’s graph, included in a research note today from UBS China economist Wang Tao, reminds us of a China-sized demographic imbalance on the way. Simply put, green on the chart means old people, blue means young people. Looking forward, China will resemble a Sarasota retirement community: lots of elderly dependents, not enough producers, inventors and entrepreneurs. But unlike Sarasota, China won’t be old and super-rich; by 2050, Goldman Sachs figures China’s GDP per person will be barely half of ours.

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