Monday, February 15, 2010

Is China's Growth Unsustainable?

Of course, all things good and bad come to an end. The Economist's Robin Bew is projecting an 8%+ growth rate for China's economy in 2010. But a little talked about statistic may soon end China's hubris. As The Economist reported back in December, the year 2010 will likely mark a major milestone in China's demographics.

Largely a result of China's one-child policy, the percentage of the population dependent on others (mostly the elderly and the young) will begin to rise for the first time in decades. Over the coming years, as fewer and fewer active workers support greater numbers of pensioners, we will see China's economy plateau and then shrink. I wonder what the ramifications of this demographic shift will be on governance? Only time will tell.

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