China Will Grow Up as it Grows Old, Fast

China’s aging population will impede its economic expansion before long.

Men stare across the bay of Shanghai, China, April 10
Men stare across the bay of Shanghai, China, April 10 (Ying Tang)

While especially American commentators fret about the looming superpower of China, Thomas Barnett in Esquire predicts that the “Chinese century” will be the shortest on record. The world shouldn’t worry about a powerful and vindictive China. “We really need to think about China’s liabilities in addition to its strengths,” he said on Fox Business this week; demographics foremost among them.

Barnett previously explained why China has reason to be anxious. “Already losing its cheap labor advantage right now, China is set to stockpile elders from here on out at a pace never before witnessed,” he wrote lost month. By the middle of this century, more than four hundred million Chinese are expected to have retired — more than America’s total projected population by that time. “That should explain what’s driving China’s seemingly selfish economic strategy,” according to Barnett.

But in addition, China is now expected to cover the spendthrift West’s need to boost exports while also serving as income elevating engine for the rest of the world’s developing economies — largely through the Middle Kingdom’s ravenous resource demands.

The United States have been urging Beijing to appreciate its currency and submit to a rebalancing of world trade in order to boost the competitiveness of American exporters at the expense of the Chinese. Barnett warns that China interprets this as “nothing less than an attempt to destroy the ruling Communist Party’s primary source of political legitimacy — namely, China’s ongoing per capita income expansion.” China won’t move on currency as long as it has millions living in poverty and many millions more whose livelihoods depend on exports to the West.

As if demographics weren’t enough of a challenge, the country has to cope clean water and resource shortages that could hamper its economic growth in the near future. “Most of China’s biggest cities already face significant water shortages,” according to Barnett, “and the majority of the country’s surface water is considered too dirty for consumption and, in some cases, even industrial use.” Chinese authorities admit that pollution costs their economy 3 to 4 percent in GDP annually but Western observers put the number closer to 10 percent.

It may slow China down but it won’t stop it from marching ahead which means that its dependence on the imports of natural resources will only increase.

Globalization increasingly wears a Chinese face, meaning — over time — China will be the first one to get sucker punched by every violent extremist out there. And not all of them will be satisfied with a red envelope stuffed with renminbi.

Until now, China has managed to free ride on American power and prevent being dragged into conflict zones around the world where it pays to build infrastructure and extract resources. It is simultaneously becoming more assertive in East Asia where its bilateral diplomacy is bothered by interference from the United States. This is not a situation that will last. “American blood for Chinese oil” hasn’t appeared on protest placards yet, “but it should,” writes Barnett, “and will eventually.”

A final element that will prevent China from ruling the world is its mounting public discontent. Urban Chinese are cautiously starting to ask for more political freedoms already and their calls will grow louder. “As the nation’s huge middle class continues to emerge over the next couple of decades, China’s single party system will fail — time and time again — to protect it from the future, which cannot be commanded,” Barnett predicts.

Thus, by the time post-Mao China hits the half century mark, when democratization will kick in for real, the country will have become a superpower no less captured by special interests at home and abroad than the United States is today.

Analysts who still worry should consider the other side of the population problem. Some Western demographers have posited that due to China’s female shortage, created by the one-child policy, it will soon be able to field an enormous army of wifeless men who will gladly wage wars around the planet to burn off all those unrequited hormones. Barnett’s guess is that mama’s only boy, “as overweight as he’s fast becoming, will be looking for a cushier route to rid himself of all those ancestral expectations.”