It might not be an Asian century after all (Fears of America's decline are exagerrated)

Asia Times ^ | 11/28/2011 | Spengler

[SeekAndFind]

Here's a thought experiment: if the United States and China maintain their present fertility rate and educational systems through the end of the century, which country will have the stronger economy? This is not a forecast, to be sure, just a point of perspective at a distant horizon.

The United States will have about one-third more university

students than China if everything holds constant, that is, if 21% of Chinese and 38% of Americans of college age actually matriculate. The quality of Chinese university graduates, moreover, is questionable; according to a 2005 McKinsey study, only one in 10 of China's recent engineering graduates was employable by multinational companies, leaving a competent core of 160,000, about the same as in the United Kingdom. China is working hard to raise the quality of its graduates, but success is hard to measure.

China will have a bigger working-age population, to be sure, but it won't be nearly five times the American level as in 2010, but a bit less than double at the end of the century - again, assuming constant fertility. Assumptions of this sort are dodgy, to be sure, but we don't observe a lot of two-child families in China even where the one-child policy no longer applies, and very few three-child families.

China is spending more on higher education, especially to bring its elite universities up to world standards, but the demographic impact is slow. Not quite 22% of 20-year-old Chinese are enrolled in a tertiary education program, a modest improvement from 19% in 2005.

The point of this exercise is not to forecast the winner.

[SeekAndFind]

CHINA HAS A BIG DEMOGRAPHIC PROBLEM...FROM THE ARTICLE:

The risk to China is not a hard landing, but complacency about the country's visible success. China has accomplished the largest migration in history, and continues to shift nearly 15 million people a year from the countryside to cities. Its demographic problems will not impact the economy for two decades or more, because so many of its people are moving from rural poverty to urban productivity.

Although the overall Chinese population is poised to decline, the absolute number of Chinese engaged with the world economy will continue to rise rapidly for some time. And the present generation of university graduates, for all the deficiencies of tertiary education, is the largest, most qualified and most ambitious in Chinese history.

If China fails to promote fertility, though, the aging and eventual shrinkage of the population will pass a point of no return around 2040. The proportion of elderly dependents will jump to 40% in three decades, which is difficult but not impossible to manage; but unless China regains replacement fertility well before then, the elderly dependent ratio will rise to 60% by 2060, and the Chinese empire will implode.

[mamelukesabre]

I think the people who imposed the one child policy are smart enough to know when to ease up. The problem is once the people are used to one child families in urban environments, how hard will it be to get them to make more babies? Russia and western europe aren’t having much luck.

[colorado tanker]

The problem is once the people are used to one child families in urban environments, how hard will it be to get them to make more babies?

I'm not aware of any country that has succeeded in doing this. Fact is to urban couples as distinct from rural couples, children are an enormous fiscal liability. Once couples get used to smaller families, they don't change.

[fallujah-nuker]

Thanks for posting Spengler, I don’t think many people read him, which is a shame because he is well worth reading.

[SeekAndFind]

BTW, Spengler is also a poster ( occassionally ) at FR. I’ve read his posts to me once.

[PzLdr]

Yeah, but the majority of American college students [and grads] are women. And not that many of them are engineering majors. I don’t share the author’s optimism.

[bert]

Such extrapolation is pretty much meaningless

[BenKenobi]

The numbers bear out. India’s in decent shape, China’s in terrible shape.

China’s not going to be able to even feed their industry with qualified workers as the one child policy takes it’s bite. The only way they get them is if they get India’s extras, and I doubt that will happen.

[mamelukesabre]

Me either. The irony is...the quality of american college grads depends greatly on immigrants from china, india, and the middle east...because our own native born kids tend to go after worthless degrees. I was an engineering major. In grad school I was the only american in the entire program. I remember looking at a list of research projects with names of grad students awhile back. I was the last american grad student to be involved in a large research project. After me they were all from asia/middle east. The interesting thing was, before 1986ish, there were ONLY american names on the research projects.