China: demographic crisis?

Much has been made recently of the slowdown in population growth in China.  China’s population grew at its slowest rate in decades in the ten years to 2020, according to the latest census data, which also showed that births declined sharply last year. The nation’s once-in-a-decade census, which was completed in December, showed its population increased to 1.41bn in 2020 compared with 1.4bn a year earlier.  The population grew just 5.4% from 1.34bn in 2010 — the lowest rate of increase between censuses since the People’s Republic of China began collecting data in 1953.  Those over-65s now make up 13.5% of the population, compared with 8.9% in 2010 when the last census was completed.

This has led many China observers and Western economists to argue that China’s phenomenal growth rate that has taken over 850m Chinese out of poverty (as officially defined) is now over.  The argument is that living standards have only risen for the average Chinese because China brought its huge workforce from the land and into the factories in the cities to produce goods for exports at low prices.  Now with an ageing population and falling working-age population, China’s economy will flag.  Given falling working population, along with an intensifying campaign by the US and its Western allies to isolate China economically and technically, China’s growth story is over.

But is that true?  Real GDP growth depends on two factors: more employment and more productivity per worker.  If it is true that China’s workforce is not going to rise but even fall over the next decades, that means sustaining economic growth depends on raising the rate of productivity growth.

In a previous post, I have argued against the sceptics who reckon that China cannot achieve growth rates of say 5-6% a year over the remainder of this decade, or more than twice the rates forecast for the major capitalist economies (the US Congressional Budget Office forecasts just 1.8% a year for the US).

For a start, while China’s labour productivity growth rate has declined in the last decade, it was still averaging over 6% a year before the pandemic struck.  That compares with just 0.9% a year in the advanced capitalist economies.  Even if you accept the revisions made by The Conference Board to China’s productivity record (which I don’t: – see the post above), China still achieved an over 4% a year productivity growth in the last decade, some four times faster than in the advanced capitalist economies.

So even if the labour force does not grow in this decade (or even decline by say 0.5% a year), real GDP growth in China is still going to be at a minimum of 3.5% a year, and much more likely to be 5-6% a year, close to the Chinese government’s forecast in its latest five-year plan.

Ah, but you see, China cannot maintain previous productivity growth rates because its economy is badly imbalanced, so the latest argument of Western China ‘experts’ goes.  What is this imbalance?  Well, up to now China has grown fast partly because of its labour supply (which is no longer rising) and partly because of massive investment, led by the state sector, in industry, infrastructure and technology. 

But now, continued expansion of investment can only be achieved by credit injections and rising debt.  And that lays the basis for either poor productivity growth or a debt crisis, or both in the next decade.  The answer, according to these experts, is that China should reduce its investment ratio (successful in boosting the economy) and switch to raising consumption and expanding service industries.

You might ask, how successful have capitalist economies been while their investment ratios have fallen back and consumption has dominated? Not at all. So this all smacks of the crude Keynesian view that it is consumption that drives investment and growth, not vice versa.  And behind this is also the ideological aim to reduce China’s state sector domination and push for a service sector dominated by capitalist enterprises (including foreign ones), particularly in banking and finance.

I have presented the arguments against this consumption model in a previous post on China, so I won’t repeat them here.  Suffice it to say that they don’t hold water. Indeed, as Arthur Kroeber, head of research at Gavekal Dragonomics, has put it: “Is China fading? In a word, no. China’s economy is in good shape, and policymakers are exploiting this strength to tackle structural issues such as financial leverage, internet regulation and their desire to make technology the main driver of investment.”  Kroeber echoes my view (as above) that: “On a two-year average basis, China is growing at about 5 per cent, while the US is well under 1 per cent. By the end of 2021 the US should be back around its pre-pandemic trend of 2.5 per cent annual growth. Over the next several years, China will probably keep growing at nearly twice the US rate.”

So there is no reason for China to abandon its growth model based on state-led investment in technology to compensate for the decline its workforce.

It has been the reason for its high productivity growth compared to the West in the last few decades and will continue to be so, as long as the government does not buckle to the siren words of the Western experts.  Those siren words have already led to the further opening-up of the financial sector to foreign companies and an increasing reliance of portfolio capital flows (namely financial investment) rather than productive investment.  Since 2017, foreign investors have tripled their holdings of Chinese bonds and now own about 3.5 per cent of the market. Equity inflows have been comparable. That makes for an increased risk of a financial bust and damage to China’s productivity performance.

The move to investment in technology rather than heavy industry and infrastructure is key to China’s sustainable growth rate and to reducing the rise in greenhouse gas emissions, where China is now the world leader. 

According to a recent report by Goldman Sachs, China’s digital economy is already large, accounting for almost 40% of GDP and fast growing, contributing more than 60% of GDP growth in recent years. “And there is ample room for China to further digitalize its traditional sectors”.  China’s IT share of GDP climbed from 2.1% in 2011Q1 to 3.8% in 2021Q1. Although China still lags the US, Europe, Japan and South Korea in its IT share of GDP, the gap has been narrowing over time. No wonder, the US and other capitalist powers are intensifying their efforts to contain China’s technological expansion.

26 thoughts on “China: demographic crisis?

  1. Hello sir, That’s very informative writeup about Chinese economy. Sir, What’s your opinion about China regarding its economic model,? Is china a Socialist economy or a capitalist one? Can you share if you have written anything about that.?

    On Sun, May 23, 2021, 2:38 PM Michael Roberts Blog wrote:

    > michael roberts posted: ” Much has been made recently of the slowdown in > population growth in China. China’s population grew at its slowest rate in > decades in the ten years to 2020, according to the latest census data, > which also showed that births declined sharply last yea” >

  2. Good to see a Western Marxist blog recognizing some of the good in China’s model of state investment in R&D and state infrastructure, as opposed to over-investment in private sector production leading to excess consumption that makes people obese and diabetic….

    And as for government debt: I hope China is catching onto the MMT debate in the West, and realizes that the national currency-issuing government doesn’t need to tax or borrow in order to spend, it just needs to limit spending to resource availability (to avoid inflation). Mainstream economists are causing enough suffering in the West already; and Biden is having trouble getting Congress to fund the repair of a few bridges, least of all funding housing for the homeless….and already Krugman and Summers are bleating about inflation. So much for the much vaunted “Western values” which makes me want to puke when ever I hear it…

    China needs to shun these Western mainstream economists at all costs.

    1. There’s been plenty of obesity and type 2 diabetes in China, thanks to its state-led capitalist development, aka state capitalism. Studies are easily found, here’s one: https://bmcpublichealth.biomedcentral.com/articles/10.1186/s12889-019-7633-0

      “The age-adjusted prevalence of overweight, general obesity, and abdominal obesity significantly increased among Chinese adults from 1989 to 2011. The obesity population is trending toward an increased proportion of males and younger individuals in China.”

      Marxists should validate against material facts, not use ideology to filter out inconvenient facts.

  3. Productivity figures need to be located in the context of their effect on the rate of profit. Since 2013 China’s complex rate of return has been falling which is why the annual rate of investment declined in the same period from over 20% to around 5% by the end of 2019. Based on the latest profit data the Chinese complex rate of return for the first quarter of 2021 was 5.7% an improvement from the rate found for the whole of 2019 which was 5.2%, itself a low point. However the rate of turnover fell from 5.17 to 5.07 which means future profit improvements will be limited. China has benefited from the shift to industrial production due to the pandemic as we have discussed in correspondence, but that is now ebbing. Here is the link to the data from China. http://www.stats.gov.cn/enGliSH/PressRelease/202104/t20210428_1816821.html (Profits, assets, inventory and days of payment all appear together in this report.) Yeah.

    Just a quick methodology note. I call this the complex rate of return because the assets provided by the Chinese National Bureau of Statistics does not separate physical from financial assets. (See note 4 on the link) Thus this rate of return is lower than the normal rate of return used in the West. Also it disadvantages state companies because they have higher cross holdings thus more financial assets over which these profits are measured.

    I agree with you that productivity is the key. In a century average productivity increases between 11 and 13-fold. Therefore everything being equal, a single worker is able to support more pensioners. That it appears they cannot, is due to inequality and therefore the command over the surplus of society, the skimming of pension funds by financial centers and of course leverage, which significantly reduces the yields on bonds, shares and mortgages which pension companies depend on.

    As for the Chinese economy it has become a siege and war economy. It is massively outproducing the rest of the world in terms of military equipment and the quality is improving all the time. If the US does not attack in the next few years their military may as well pack up and go home.

  4. China’s recipe for the aged: less from government Social Security pensions, no company defined-benefit pensions (destroyed in the U.S. starting in the 1970s), but rather defined-contribution financial schemes – that is how the government entrenches capitalism and finance capital in “socialist” China.
    From a news report:
    The China Banking and Insurance Regulatory Commission (CBIRC), the country’s top banking and insurance regulator, said at the weekend that it is expanding a pilot program of private pensions into two more regions – Chongqing and Zhejiang province. Sources told Reuters CBIRC is also considering endorsing a list of private pension funds and appointing a group of professional managers to run them.
    The change comes days after reporting that citizens aged 65 or older accounted for 13.5% of its 1.4 billion population in 2020, jumping from 8.87% a decade ago.
    Former finance minister Lou Jiwei said last year that the state pension on average sustained the retired with less than 50% of the income they earned before retirement, and that ratio was expected to go down further.
    –Reuters, May 20, 2021, https://www.reuters.com/world/china/ageing-china-boosts-private-sector-role-pensions-time-bomb-ticks-2021-05-20/

  5. I know this is not important for economists, but, in politics and in History, it doesn’t matter how well a given social entity (country, kingdom, empire, system etc.) fares at a given point in time, but if it fares better than its geopolitical enemies.

    China’s economic numbers are not extraordinary in isolation. They’re impressive for two factors:

    1) the scale (1.4 billion people);

    2) that they’re happening at a moment the capitalist pole of the world is historically weak (i.e. near stagnation).

    The USSR grew more* than China in a comparable period of time (and it lost 10 years just to go back to the prewar economic levels!). China’s luck lies in the fact that its ascension happened to happen during a period of capitalist decline, while the USSR’s ascension happened during the apex of the capitalist system (the “Golden Age of Capitalism”). That’s why the USSR’s admirable feats** were not nearly enough, while China’s comparatively lukewarm ascension feels a lot more menacing and inexorable to the capitalist portion of the globe.

    From the point of view of the socialists, the lesson China gives is this: they managed to do the reforms Gorbachev couldn’t. The differences that made Deng Xiaoping’s reforms an ultimate (even if long and tortuous) success and Gorbachev’s Perestroika a monumental failure are yet to be fully investigated.

    P.S.: China’s financial opening up since 2016 was inevitable from a political point of view. The USA’s greatest asset today besides its military is the Dollar Standard, and, if you want to defeat the American Empire one day, you have to eventually challenge (and destroy) the Dollar Standard. Otherwise, the USA would eventually destroy China with some economic strangulation and isolation (as it did with the USSR), inducing it to some kind of “middle income trap” or an induced neoliberal-esque monetary-financial crisis. It was a necessary step back for the Chinese.

    * There’s a lot of debate among economists on the reliability of the Soviet economic data. They’re reliable in the sense there are not intellectual dishonesty in them: all the deficiencies, if present, comes from difficulty in gathering the raw data to begin with (i.e. their incompleteness), not with their falsification. The Bolsheviks had a strong intellectual tradition (even Stalin, considered the least intellectual of them, was extremely erudite and intelligent compared with today’s politicians) and, as a result, they tried to destroy their political enemies in the intellectual arena, not with cheap data falsification. Trotsky, for example, didn’t shy away from praising the results of agriculture in the regions where it really was successful (which he himself collected) even when he was the pro-heavy industry cheerleader of the Party. It was the rule in the Bolshevik Party for the victorious faction to unashamedly adopt the correct policies of the defeated faction after the internal struggle was over, Stalin himself adopting many of Trotsky’s suggestions after he secured power.

    ** Even if we doubt the GDP data for the USSR at the time of its dissolution, we have to accept that the present-day Russian Federation, even being just a shadow of the USSR (and after being essentially ransacked for ten years by the IMF), is a formidable enemy of the American Empire, having maybe the most advanced military in the world. You can point out the Third World aspects of the Russian Federation, but you have to accept the fact that it is no Brazil.

    –//–

    As for the demographic issue, well, the propaganda didn’t last for too long:

    Long Slide Looms for World Population, With Sweeping Ramifications: https://www.nytimes.com/2021/05/22/world/global-population-shrinking.html (NY Times)

    As soon as the demographic data for the other countries (including the USA) came out (right after the Chinese one), the whole argument of “China is collapsing due to a demographic crisis” fell apart.

    Low birth rates are a problem for the whole world, not just China. Geopolitically, it evens out.

    1. ‘From the point of view of the socialists, the lesson China gives is this: they managed to do the reforms Gorbachev couldn’t. The differences that made Deng Xiaoping’s reforms an ultimate (even if long and tortuous) success and Gorbachev’s Perestroika a monumental failure are yet to be fully investigated.’

      The “differences” aren’t really all that mysterious. Deng’s reforms relied upon 1) state subsidies to agricultural production, or, in reality, transfers from the working class to rural producers 2) “cheap labor” to attract foreign direct investment as “unauthorized” migrants from rural areas drove down labor costs) FDI over 30 years of approximately $ 1 trillion.

      For Russia to “produce” capitalism along the same lines meant a tremendous decline in living standards, worker protections, and equality between genders, which was imposed through collapse and the “shock treatment” advocacy of Yeltsin. Of course, the FDI was not forthcoming. Big surprise.

      “The Bolsheviks had a strong intellectual tradition (even Stalin, considered the least intellectual of them, was extremely erudite and intelligent compared with today’s politicians) and, as a result, they tried to destroy their political enemies in the intellectual arena, not with cheap data falsification.”

      Talk about historical falsification, the above paragraph is just jaw-dropping; “destroy enemies in the intellectual arena”? “Not with cheap data falsification”? Sure, that explains the purges, the labor camps, and the executions. No falsification going on there. Just murder.

      1. The purges came later. By 1925, Trotsky (and his followers) already was defeated in the political arena and, by 1926, Kamenev and Zinoviev had already lost the debate within the party.

        If you read the debate that happened after Lenin’s death (January 1924) but before Stalin’s rise (1926), you can see that the debate between situation and opposition was one of emphasis, not ideology. Both sides agreed the end goal, but not how to get there. Besides, both sides frequently exchanged places in their emphasis, which is a strong indication the underlying factor of an apparent duel of egos was truly the base of the Party, i.e. support and pressure from the masses affiliated to the Party. That’s why Stalin ultimately won: he was the only “foot soldier” of the high echelon of the Party, while the others were essentially intellectuals with not mass support from the base.

        By the times the purges came (1930s), Stalin had already won the debate. The purges didn’t happen because Stalin was afraid of some revealing truth. The first Five-Year Plan (1928-1932) was a popular success, even though it didn’t show any immediate results (because it happened at the same time of the capitalist collapse of 1929); popular opinion was already won towards Socialism in One Country and its consequent forced collectivization.

        Besides, we have to face the harsh reality that the purges were not that unpopular policy Westerners think they were. They were confined to the middle and high strata of Soviet command chain, thus affecting little, if any, the daily life of the average Soviet citizen. In the Red Army, it was even popular, as it removed what were perceived to be incompetent officers. It is an exaggeration to state the Soviet people lived in constant fear during the 1930s, waiting for an NKVD officer to kidnap him or her any moment, anywhere.

        Even then, what was falsified were the confessions, not the objective economic data. Indeed, it would be euthanasia for a centrally planned economy to falsify its own economic data, if you think about it. Even in capitalism, you have to assume economic data is precise because the system must be kept intact, falsification and disinformation happening in other areas of social reproduction.

        This conducts us to another interesting curiosity: most of the preconceptions about the Bolsheviks in the West have taken shape since even before they took power in 1917. Western Social-Democracy – specially the German SPD – have always deplored the Bolsheviks and always sided with the Mensheviks. After 1917, Western Social-Democracy continued to defend the Mensheviks and, after 1918, the SRs (who fled and found exile in Germany). Exiled in Germany, the Mensheviks and SRs continue to publish about Russia. If you read their newspapers and other publications at the time, as well as the German takes, you can clearly see the old accusations Westerners nowadays attribute exclusively to Stalin were already present since the time of Lenin (e.g. being a sanguinary mass murderer, a Gran-Russian chauvinist).

        That means there’s strong indication the history of the USSR we have in the West is mostly a propaganda fabrication. They represent the Menshevik and SR’s point of view, which survived in Germany, and then perpetuated and propagated to the rest of the West through the German social-democrats. But when you read the Bolshevik sources of the same time, a new, very different reality, arises.

  6. One important factor that is rarely mentioned in discussions about China’s falling workforce is the issue of immigration. Immigration has been a major factor in economic growth in the US, UK etc. This explains their rising populations. Japan on the other hand has suffered long term economic stagnation, a falling population, and a growing demographic imbalance between its workforce and retirees. To partially overcome this Japan has introduced policies to encourage more women to enter the workforce. But it has been unwilling to loosen its racist restrictive policy on immigration.
    If China’s policy of increasing productivity to offset a falling workforce does not work sufficiently all they have to do is open their borders to immigrants and recruit the appropriate number and type of young workers they need from the developing world. Given the rapidly rising real wages of Chinese workers, there would certainly be no lack of volunteers.

    1. That would not make much sense for China because it is a socialist country.

      They already went through the pains of lifting 850 million people from poverty. Why would they revive this problem by importing more poor people from the rest of the world?

      Sure, in a capitalist country, poverty is not only not a problem, but may be even a solution (industrial reserve army). That’s why the USA thrives on mass immigration from Latin America and continues to tacitly stimulate those immigrants to keep coming. But China is not a capitalist country.

      Also, there’s the geographical barrier of Central Asia (vast desert, Himalayan mountain range, low population density) and the idiomatic and cultural barrier that keeps China from being a coveted destination for immigrants.

      1. Immigration doesn’t have to be done on the same exploitative model as it is done in the advanced capitalist countries. Also immigration is not just movement of the unskilled. Many immigrants to the US are skilled professionals and graduates moving to work in the most advanced companies and educational institutions. Or to set up companies. The more that China advances the more it will attract skilled workers and people wanting to create businesses. In fact, this process is already happening on a significant scale.
        As to cultural barriers, for many people these are very much secondary issues compared to career and life opportunities.

  7. I would expect that China, like most developing countries, experiences slower productive once they finish picking all of the low hanging fruit and have to innovate (vs copy and/or steal) just liked the advanced economies do. It’s already slowing down and should likely be asymptotic at some tine in the foreseeable future. The author seems to make the mistake that all trends extend in perpetuity. They don’t and don’t defy the laws of physics

    1. But why, e.g. a 1% growth for the EU very good but a 6% growth for China very bad?

      The only parameter you can use to justify this interpretation is simply postulating the EU represents the pinnacle of human civilization. The problem with this parameter is you don’t have a crystal ball, you can’t know if that’s true. It’s the “End of History” fallacy, which in bourgeois economy is better represented by the theory of the “Middle Income Trap”.

      That’s why we must always take the historical context into consideration. The impressive thing here is not that China is growing 6% per year: it’s the fact that its growing 6% in 2020, when the rest of the developed world is barely growing 1.5%. The same is true for its poverty eradication (in a context where the rest of the world poverty is increasing and not decreasing).

      Innovation will be a watershed moment for China eventually, but it is worth noting the USSR took the lead on innovation at the end of the 1950s (space race) and, in long run, it didn’t win it the Cold War. We have to qualify innovation in order to try to make any geopolitical judgements.

      1. China hasn’t eradicated poverty. That’s a CCP talking point.

        Just take a trip to the countryside. Rural Chinese are living on less than 5 dollars a day. They wouldn’t have migrant workers living hundreds or thousands of miles from their villages if they did.

        This article makes no reference to the Household debt to GDP rising for years in China in a few years they will match if not exceed the US household debt to GDP. Once that happens consumption will be constricted.

        It also makes no mention of the water crisis and desertification of large swathes of land. Not to mention the rampant pollution of water supplies.

        They are already losing low value manufacturing to their neighboring nations at breakneck speed. At some point those neighbors will move up the value chain.

        Charts aren’t going to show this. But taking a macro view you will see that China has issues and nothing is guaranteed too go on forever.

      2. Taking the lead in one sector does amount to taking a lead globally. The fSU never overcame the poor productivity in its agricultural sector, the really limit to its growth, which trapped 1/3 of the population as compared to less than 2% in the US. China faces parallel limitations with explosive potential.

      3. @ Czll

        From the (geo)political point of view, the matter here is not if the CPC eradicated or not some concept of poverty (for poverty is, by definition, a relative concept), but that, in 2021, it eradicated the consensual concept of poverty.

        Nobody was complaining about the World Bank’s threshold of poverty when it benefited the Western powers and their NGOs. Either way, the CPC adopts regional thresholds of poverty, according to the province (a logical approach, but, either way, also inherited from the Soviets, who also did the same for prices and allocation of the budget).

        From a socialist point of view, the important thing is that the CPC put for itself a goal for eradicating poverty (or a certain level of poverty, if you prefer) and achieved it. This is a complex objective and a long term one, so it is very important, for a planned economy, that the Party is capable of achieving it.

        From the capitalist point of view, we can infer this poverty eradication by China is significant. It is significant to a point where they feel the necessity to engage the CPC in propaganda warfare. China’s purchase power is growing and has grown to a point where it is starting to warp the decisions of the Western big corporations, thus affecting directly the lifestyle of the average Westerner (e.g. Hollywood and the video game industry appeasing to the Chinese to a point to have caused some first signs of consumer revolt in the West and animosity towards the Chinese).

      4. Samir Amin, while astonished by the rapidity of positive development in China, predicted that eventually imperial pressure would force China’s leadership to either give in to its comprador element and become “lumpen” producerrs, like the other “Brick” countries, or trade their suits and ties for Mao jackets.(Soviet Russia’s “stalinist” choice?). Whatever it’s choice,” socialists” in the West must not blame the victim and must organized to oppose a “war of humanitarian intervention” against (an “authoritarian,” imperialist”) China), as we have failed to do (with the exception of vietnam) since the korean War..

      5. Your last paragraph suggest that the reactionary phase of class struggle is ending or over. Neoliberalism, born in the 70’s (with Nixon’s visit to China) is dead, somewhat obscured by the pandemic pall with which is covers itself. History must and is changing course, hopefully without war.

    1. technological development certainly effects change in social arrangement, but it can also be instrumental in maintaining the fundamentals of social relations within a given social order, especially in the effects of IT techology: military, policing, and surveillance technology: drones, robo cops, gig labor platforms, etc. Revolutionary change is a function of the social relation between ruling elites and the laboring classes.

      1. Your comment on Samir Amin is an good and necessary observation. I have not read Amin, but I fully agree that China will give in, and is already doing so, to imperialist-capitalist pressure. It has already been happening for several decades according to a multitude of quality and truthful reports (reports in this same blog as well). Without going any further, in Charles’s comment above, there is news that the Chinese Government is implementing private pension programs in various regions of China, starting with the provinces of Chongqing and Zhejiang. What if they are now privatized What else should we wait for to affirm that China is heading (or is it already) towards capitalism? Privatizing pensions is an extreme measure of pure and simple neoliberalism, of the type Chile and other countries influenced by the IMF and the school of Chicago Of course, capitalist pressure influences (if capitalism is present in 2/3 of the World-System, that pressure must exist) but also some leaders of socialist parties eager for multimillion-dollar personal benefits, leaders who have stolen royal command and dominance, also influence. about a State that should be in a social, common and cooperative property of all its citizens in a democratic socialism. Does this capitalist pressure only happen with the result of privatization in China? No, it has happened in all socialist countries. In all without exception, I insist. In fact, it has also happened and continues to happen in the false Western democracies throughout the OECD, Latin America, Africa, etc. Since the 1980s. It is evidence and scientific law of the 1st order, without a doubt and in my point of view. And it is a cycle of class struggle in its reactionary phase. Phase in which the social ownership of the means of production reverts to its previous private ownership. She does not go back alone, walking placidly and on her own, of course. It is only being captured by the big capitalists.
        On the subject of the article, does the reduction of the Chinese State have nothing to do with the reduction of the birth rate, labor force, productivity and growth of China? Haven’t those same demographic and economic declines happened in capitalist democracies after the Golden Age?

  8. May I recommend to read this article by Mark Kruger which is currently the third most read article on Yicai Global:
    Is China Facing a Demographic Crisis?

    Please allow me to quote two paragraphs from that article:

    Agriculture employs about a quarter of China’s workforce. What kind of productivity increase might we expect if some of these farm workers shifted to more productive undertakings?

    One of the key channels through which productivity increases is education. According to economic theory, workers become more productive as they accumulate “human capital”, which is modelled as proportional to the number of years of education.

    The recent census shows that China’s educational attainment continued to increase. In 2020, those aged 15 and above had, on average, 9.9 years of schooling. That was up from 9.1 years in 2010.

    Over the next 30 years, it is reasonable to expect that educational attainment will increase further. Let’s assume that average years of schooling rises to 12.2 years by 2050. That’s where Korea is today. By comparison, Germany is at 14.2 and Canada, Switzerland and the US are at 13.4.

    If human capital increases one-for-one with years of education, that means that after 12.2 years of schooling, the average worker would be 23 percent more productive than one today.

    On the author:

    Mark Kruger is Yicai Global’s Opinion Editor and Senior fellow to the Yicai Research Institute. He is also a Senior Fellow at both the University of Alberta’s China Institute and the Centre for International Governance Innovation. Mark was formerly a Senior Policy Director in the Bank of Canada’s International Department, a Senior Advisor to the Canadian Executive Director at the International Monetary Fund and head of the Economic and Financial Section in the Canadian Embassy in Beijing.

    Interesting, too, his article on the question Can China be the Next Korea?

    About Yicai Global

    Launched in August 2016, Yicai Global is the English-language news service of Yicai Media Group, the financial news arm of Shanghai Media Group, which is China’s leading media concern after the China Central TV. In 2015, a unit of e-commerce billionaire Jack Ma’s Alibaba Group took a 30 percent stake in Yicai. Focused primarily on China’s Business, Yicai Global’s purpose is to provide reliable and insightful information and analysis of the economy, finance, tech, startups, and entrepreneurs. Yicai Global expects to capitalize on its great chance to become a big player in the global financial media scene and become a cornerstone of the Chinese dream of this generation.

    1. The only problem is despite showing the rising productivity from further urbanisation and increased education, the article raises the idea of delaying the retirement age until 65. I hate these academics, and journalists blithely propose such changes without any mention of the massive deterioration they imply for people’s quality of life.
      Just look at the, UK where workers are having to retire later in a phased delay until 70. This despite any reference to the massive increase in productivity that has occurred since the 1950s. Or the 30% increase in the workforce in the last 15 years (24 million to 32 million) due to immigration (mainly from Eastern Europe).

  9. Consistently excellent posts on China’s economy.

    On Sun, May 23, 2021 at 2:38 AM Michael Roberts Blog wrote:

    > michael roberts posted: ” Much has been made recently of the slowdown in > population growth in China. China’s population grew at its slowest rate in > decades in the ten years to 2020, according to the latest census data, > which also showed that births declined sharply last yea” >

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