DEMOGRAPHIC TIME BOMB — China’s population declined for the first time since 1961, according to data released today by the National Bureau of Statistics of China, which reported 9.56 million births and 10.41 million deaths in 2022.
While an aging population is a problem faced by countries around the world, the new figures are a harbinger of a demographic crisis for China, given its economic model. The percent of people aged between 16 and 59, the standard age range of China’s workforce, also edged lower to 62 percent of the population, down from above 70 percent a decade ago. And demographers forecast that the proportion of residents above the age of 60 will rise by one-third come 2050.
China’s economic stability is of central importance to the global economy. Factories in China produce a greater share of the world’s manufacturing than the United States, Germany and Japan combined, and the sprawling nature of the American supply chain means Washington remains reliant on China for a host of civilian and military technologies.
At the same time, China’s leader Xi Jinping has faced rising public dissent in response to his zero-Covid policies and economic insecurity which spurred rare protests that called for the country’s leader to relinquish his grip on power.
To make sense of what the population decline means for China and the global economy, Nightly spoke with Phelim Kine, POLITICO’s D.C.-based China correspondent. This conversation has been edited.
China released figures today that show for the first time since the early 1960s, the total population declined by 850,000. At the same time, the age of the population is rising. How significant are these developments?
These latest figures underscore the profound economic issues China is bound to face in the coming years. When China opened up to the world starting in 1979, that meteoric economic transformation was powered by the fact that there were seemingly endless waves of young rural dwellers who became the backbone of this manufacturing assembly economy, which was built on export manufacturing, and also on huge influxes of state spending and fixed asset investment. In short, what these numbers mean is that the economic model that China has used to get to this level of becoming the world’s second biggest economy is now basically under siege because there are not enough bodies to do the work anymore.
We have this problem now of a shrinking working-age population, meaning no one is filling the void from the overall population decline. The retirement age being relatively young in China creates this balloon effect — the numbers of elderly people who need state support are rising, while the working population that supports them through taxes or other measures declines. The problem of demographics affects countries like Japan, South Korea, Taiwan and more of the European world. But in China, what we’re really seeing play out is that the country will be old before it’s rich — that’s bound to have profound effects on the economies of China and globally as well.
How does this affect countries other than China? In what ways could economic concerns in Beijing reshape the world stage?
An unstable China is an unstable world. The country has had a one-party system that’s held absolute control for the last 70 years. Any fray in that dynamic is a signal of uncertainty and instability, which is bound to take its toll on global markets. The second thing is that even though China is bottoming out in terms of this relatively young population that produces commodities like iPhones and tablets, it’s still the center of global supply chains. During the first year or two of the pandemic, things we relied on China for weren’t coming or faced delays because of Covid-19 related supply chain disruptions. Imagine those types of roadblocks exacerbated, but with no working-aged populace to fill the void.
What significance does it hold that these numbers are being released publicly? What does this mean for future government policy, if anything?
Chinese statistics are highly questionable at the best of times and the government is known to manipulate or hold back statistics depending on how they feel about the impact on the government. You can see that right now in terms of how they deal with release of death statistics for Covid-19. But with this information being publicly released, what’s happened now is that the Chinese government can no longer deny or obfuscate how its policies are contributing and have contributed to what is going to be a really serious kneecapping of future economic growth in China. What this signals is that the government is keenly aware that the more brutish, totalitarian approach you might have seen in past regimes like President Mao Zedong aren’t as effective anymore. China’s government aims to convince and persuade, not clamp down too harshly, because that backfires and generates more popular resentment nationally.
If anything, there are policies that China could use to stem the issue or keep it contained. France, for instance, is working to extend the working age population. We have seen piecemeal efforts toward that in China, for instance, the Jiangsu province is also seeking to raise the retirement age, but broadly, the central government isn’t making any major types of moves in that regard.
We’ve recently seen rare protests in China, including against the strict zero-Covid policies which saw the government change course. What effect do you think the decline of the population and its effect on the economy will have on civilian dissent?
A worsening economy is the worst nightmare of the ruling Chinese Communist Party. If we look historically, economic distress and concerns over corruption were what brought students out during the 1989 protests in Beijing’s Tiananmen Square. The government knows this is a potential powder keg. And since 1989, the sort of silent and implicit agreement between the CCP and China’s people, is the message that ‘we are going to economically blossom, you will prosper. All we asked for implicitly is don’t question the status quo.’ We’ve already seen this type of messaging hitting a wall in recent months, mostly in response to both the conditions of zero-Covid policies but also the toll it took on the national — and therefore international — economy. The population decline could be a real potential stability problem for the government, because people already have a lot of concerns about the political status quo and how the country is managed. Those economic dividends are no longer worth making the sacrifice of political rights worth it.
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BANNED IN THE USA — The Biden administration today announced new visa restrictions for 25 individuals in Belarus amid that nation’s move to put an opposition leader and other activists on trial for treason charges, writes Kelly Hooper.
“These politically motivated trials are the latest examples of the Lukashenka regime’s efforts to intimidate and repress those who seek justice, respect for human rights, and a democratic Belarus,” said Secretary of State Antony Blinken in a statement.
The new order targets “regime officials,” including members of the National Assembly of Belarus, who took part in authorizing the death penalty for people convicted of supposed “attempted acts of terrorism” — a charge the State Department said has been used to intimidate the democratic opposition. Some of the individuals targeted have also supported legislation revoking citizenship for people outside the country charged with “extremism” and confiscating property for “unfriendly actions towards Belarus,” the State Department said.
The move to impose visa restrictions comes as the authoritarian regime of Alexander Lukashenko has put exiled democratic opposition leader Sviatlana Tsikhanouskaya on trial in absentia on treason charges and “conspiracy to seize power.” Tsikhanouskaya challenged the results of the 2020 presidential election that she ran in against Lukashenko, who declared himself the winner. She fled the country following a deadly crackdown on mass protests against alleged election fraud, and now faces a possible jail term of up to 15 years.
CALIFORNIA DREAMIN — Abutting California, a state with one of the most progressive tax codes in the country, is Nevada, which has no individual or corporate income tax, along with a slew of financial security laws that many rich Californians use to hide their assets. The scheme is now being put to the test, though, as a wrongful termination lawsuit against a segment of the Getty family is now exposing their practice of moving assets to escape taxation. Chuck Collins and Kalena Thomhave report for The American Prospect.
PASTA AND AN AUDIENCE — When a couple hundred major donors to Gov. Ron DeSantis’s inauguration arrived at a candlelight dinner to the sounds of a solo saxophonist the night before his swearing-in last week they found a pair of surprises waiting for them, writes Jonathan Martin.
In a departure from the pedestrian fare found at most political banquets, DeSantis, a food-lover with Italian roots, flew in the crew from Carbone, the trendy, New York-founded restaurant chain that moved to Miami last year, to both make a point about companies relocating to Florida and to offer a treat to contributors who gave at least $25,000.
Yet what was even more of a thrill to the donors than Carbone’s signature spicy rigatoni was what happened during the dinner: DeSantis and his wife, Casey, went table to table greeting and thanking the attendees.
Such a gesture would hardly be noteworthy for most politicians. But the early rap on DeSantis from his fellow Republicans is that, for all his smarts and shrewdness, he lacks charm, and is either unwilling or unable to submit to the longstanding rituals of retail politics.
So the mere fact that he table-hopped at a dinner in his honor — and that more than a few of his contributors were thrilled enough about the personal touch to recount it to me after the closed-press fete — is revealing.
The governor’s glad-handing illustrates that he’s absorbed the critique about his aloofness and is making an effort at rebutting it. The delighted response about an unremarkable show of gratitude demonstrates how little of it he’s done to date; and the relish with which his glancing interactions were recalled indicates how low the expectations bar is for DeSantis and what it means to an important constituency when he clears said bar.
What does it reveal about his broader presidential ambitions? And can he overcome perceived likability problems? Read the reported column.
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