Wednesday, August 28, 2013

A Slow Death: Transitioning From Construction to Consumption

A shrinking labour force, an aging population and increasing problems with pollution are just some of the problems that China faces in moving it's economy from construction to consumption.

The main one being, of course, the demographic issues created by traditional believes that favour male heirs, and the massive shortfall in children that won't be able to fill all the jobs that their parents have.  The mess that has been created by policies that have focused on the short term won't be kind to the next generation
China faces a similar demographic time bomb. According to China’s Ministry of Education more than 13,600 schools closed in 2012. This is a result of the one child policy. Apparently the number of primary school students fell from 200 million to 145 million between 2011 and 2012. Remember, these school children are supposed to be the future taxpayers.

At the other end of the spectrum China has an impending social security crisis. The People’s Daily newspaper published an article recently warning the number of elderly could rise from 194 million in 2012 to 300 million by 2025.

The Chinese government's main priority has never been to create a sustainable economy.  Sure, it would like to encourage foreign investment, but only in order to placate a society which demands growth from it in all sectors.

Keeping in the working population happy is the number one goal, and this has been achieved through promoting the idea that turning against the Party will result in an economic and social apocalypse.  The CCP seems to have engineered it's own downfall - one that won't affect the current leadership, but the future looks less than rosy for the next generation.


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