Posted on 07/02/2023 9:05:13 PM PDT by FarCenter
A meme popular among American pundits claims that China’s economy is doomed by a slowly declining population. More important than the aggregate Chinese population is the technically proficient Chinese population.
That has grown 20-fold, or by 2,000%, in the past 40 years. Other Asian countries, notably South Korea, previously achieved record-shattering productivity gains with similar enhancement of skills.
We’ve heard this argument before, applied to the Asian Tigers. The doomsayers had their heyday just before East Asia’s growth went vertical. Perhaps the worst economic prediction in recorded history was Paul Krugman’s 1994 assertion that the Asian economic miracle was a myth, and that the Asian Tigers—Singapore, South Korea and Taiwan—would crumble like the Soviet Union.
Krugman, an academic, Nobel Prize winner in economics and New York Times pundit, claimed in a celebrated Foreign Affairs essay that “the newly industrializing countries of Asia, like the Soviet Union of the 1950s, have achieved rapid growth in large part through an astonishing mobilization of resources. Once one accounts for the role of rapidly growing inputs in these countries’ growth, one finds little left to explain. Asian growth, like that of the Soviet Union in its high-growth era, seems to be driven by extraordinary growth in inputs like labor and capital rather than by gains in efficiency.”
The Asian Tigers, Krugman averred, were “running into diminishing returns.” But manufacturing productivity in South Korea rose more than five-fold between 1994 and 2012, an astonishing achievement.
South Korea’s industrial work force fell during its great manufacturing boom, but it caught up to and in some cases overtook Japan in key industries, including semiconductors, displays and automobiles. No Japanese company today can compete with Samsung in computer chips.
In 1990, just 35% of South Korean high school graduates went on to some form of higher (tertiary) education; by 2010, the proportion stood at a remarkable 100%. Seoul has more PhD’s than any other city in the world. The South Koreans invested impressively in plant, equipment and infrastructure, but most of all, they educated their people to world standard.
China is now attempting on a gigantic scale what South Korea did during the late 1990s and early 2000s. Krugman’s diminishing returns argument of 1994 has resurfaced in the case of China: China has already moved most of its rural population to cities, and can’t count on the surge in labor supply that powered its growth during the 2000’s.
Its previous growth relied on massive labor and capital inputs rather than gains in efficiency. Its aging population won’t save as much as retirees begin to spend down savings, so capital will become scarcer. It has saturated its export market in developed countries, and so forth.
All of these arguments are factually correct, just as Krugman’s argument about the Asian Tigers was factually correct in 1994, that is, correct about facts of the past that had become irrelevant. What Krugman missed and the China doomsayers miss today is the intersection of jump in human capital and the emergence of new technologies.
South Korea’s new educated workforce mastered Third Industrial Revolution technologies and transformed what had been one of the world’s poorest countries into a high-tech powerhouse within a single generation.
When Deng Xiaoping began his economic reforms in 1979, just 3% of Chinese high school graduates went on to tertiary education. Today, the proportion is 63%, about the same as most European countries. A third of Chinese undergraduates study engineering, compared to just 6% in the United States.
However, China's mean IQ is about 105 or 1/3 of a standard deviation higher than the US. Therefore, its number of high IQ individuals is probably 6 or 7 times that of the US.
Finally, fewer of China's high IQ individuals study useless majors.
I look at it right now as something to keep an eye on.
I’m not convinced either way right now. There is reason to
believe that China is facing age related issues. With
reproductive declines and the old class expanding dramatically,
it is very easy to see how there could be some real issues.
I have seen projections that China’s populace could drop by
50% by 2050.
It’s an interesting topic. I don’t have an axe to grind on
it. What will be will be.
Good point.
I would also note that China is shedding or automating lower end manufacturing.
But they don’t have the bureaucratic, economic or cultural atmosphere for innovation yet.
That’s true. And if you are thinking along the lines of
populace replacement, those two people are replacing those
same eight. That’s a 75% drop. Even with a child you’re
still talking about three replacing eight in one
generation, which is a 62.5% decline.
In just two generation we’re talking about a real
implosion.
We’ll see...
They’re so smart they’re under a communist dictatorship.
Cope.
In an age of technological advances occurring at an exponential rate, including artificial intelligence, the power of a nation will come not from a sheer mass of population. In fact, strong arguments can be advanced that large populations are liabilities rather than assets in our upcoming Brave New World.
China’s mean is higher, but their standard deviation is lower. That greatly impacts the numbers at the high end of the distribution.
Do you have a reference for Chinese standard deviation of IQ?
Grandpa and grandma Han are training in inflatable kiddie swimming pools for the imminent invasion of Taiwan.
Check out the wealthiest and “smartest” areas of America and most of them have no problems electing the most radical of Communists. So much for intelligence...
“ Check out the wealthiest and “smartest” areas of America and most of them have no problems electing the most radical of Communists. So much for intelligence...”
Yep.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.