Aging into a China implosion?

Despite the recent conclusion of the “Phase 1” trade deal between the United States and China, it still seems likely that the 21st century will be defined by the geopolitical rise of China and the ongoing tensions that will create. As has been pointed out in many places, one of the few policy issues that’s getting enduring bi-partisan support nowadays in Washington, D.C. is opposing China. What exactly that means isn’t exactly clear, but along with this general attitude comes a general interest in ways China might implode, rather than be confronted directly.

Among those is the idea that China will become too old to continue to grow into much of a threat, thanks in part to the last effects of the now-ended one-child policy. Economist Dean Baker with the US-based Center for Economic and Policy Research has a counter-argument to that view. In it, he outlines how China’s continued growth in productivity will likely swamp the impact of an aging population, allowing the country to enjoy a higher standard of living into the future. If China is able to maintain a high level of productivity growth, then it might be that portions of the US foreign policy community could be banking on wishful thinking.

But beyond the US, the aging of China might have implications for Southeast Asia economies, as well. It can be difficult to make dramatic improvements in elder care (and health care, in general). For example, it’s likely that most people would like to keep the ratio of elder care workers to the elderly fairly low. The human touch matters in these settings. So where could an aging China that still has relatively rich citizens (thanks to those productivity improvements) get younger workers? Southeast Asia.

For example, Singapore already imports younger labor from other countries for its domestic and construction workforces. Those same workers are also used often to help the elderly. China could do much the same. This could be advantageous to those workers, as well, if they were able to move permanently to a richer country. However, the knock-on effects could be difficult. While China might import younger labor to solve its problem, it would simultaneously be exporting an elderly crisis in those countries, where family members would not be available for care.

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