China’s rate of economic growth has been phenomenal; but, what could possibly slow it down? I believe that the answer is: China. Yes, China itself!
China’s Population (1.37 Billion) is aging and the average household is 3.1 people, down from 3.44 a decade ago. Conversely, 13.3% of the Population is now over Age 60, up by nearly three percentage points from ten years ago. And, as the Birth Rate decreases and the Population grows older, the impact on the Economic Growth of China comes into question. With less workers, there will certainly have to be an economic slowdown.
The One Child Policy was instituted, in 1979, just after Chairman Mao Zedong’s Cultural Revolution, to stop the burgeoning Birth Rate. Well, it did, and now China is at the other end of the population spectrum. So, let’s look at the Chinese Economy.
Roughly 65% of China’s Industrial Production is for Export, with only 35% being consumed domestically. Most of that output is lower-end production and employs younger workers. Accordingly, it seems to be already built into the Chinese Economy that it will put the breaks on itself.
The Economic Slowdown will not occur overnight; however, given the demographics, I believe that it will just be a gradual process. China has been considering halting the One Child Policy; however, as yet, it doesn’t seem to be in the process.