China's demography is not destiny

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It is no surprise that China’s National Bureau of Statistics (NBS) quarterly press releases on its GDP statistics are closely followed. After all, it is the second largest economy in the world—the largest on some count—so much is at stake. Last Tuesday, though, it was not the reported 3 percent growth rate for 2022 that stole the show, but a number from a normally obscure part of statistical work, demographics. For the first time since the Great Leap Forward, Mao’s disastrous development experiment that resulted in a famine that killed tens of million China, the NBS reported a decline in population. It was a small decline, at 850 thousand less than 0.06 percent of the population, but a decline nevertheless, which signifies the end of an era: with the decline it is likely that India, not China, will from now on be the most populous country in the world.News agencies and newspapers jumped on the number. “China's first population drop in six decades sounds alarm on demographic crisis” headlined Reuters; “China’s Population Falls, Heralding a Demographic Crisis” wrote The New York Times. The fear (or hope) among many observers is that China’s demographic decline spells doom for its economic growth, its real estate sector, pension and health system, and even, as Yicai pointed out, for the sales of baby formula. Comparisons with Japan after the collapse of its asset bubble in the 1990s, which coincided with a demographic turning point, have also been made. Thanks for reading Bert’s Newsletter! Subscribe for free to receive new posts and support my work.Current population trends i…