Hey, everybody, Peter Zion here coming to you from Marshalltown, Iowa, my mom was a little upset that the videos I did earlier did not have a flower garden in the background.
Your topic today is Chinese demographics, we’ve gotten some new data out of the Chinese that has made the way to the UN. And so the updates have allowed us to update our assessment, and oh, my God, it’s bad.
Okay, so let’s start with this first graphic to show you where the official data had us as of a year or two years ago: this narrowing for the bottom seven age blocks is the fastest aging workforce in the world, and arguably the fastest one in human history.
This indicates that the number of new workers coming in is so small compared to the number that are retiring, that you’re having massive increase in labor costs, and from adjacent numbers that we do trust. I mean, Chinese data is always a little touch and go. But from the numbers that we do have that we do trust, which is labor costs, Chinese labor is increasing at the fastest pace of any country in any era at any time in history, including during the Black Death itself.
Since 2000, the cost of Chinese labor has gone up by about a factor of 15. While the size of the Chinese economy has only expanded by a factor of about roughly 3.5, to four. So really, really bad. The Chinese are only an industrial power today under this data, because of the sunk cost of the industrial plant that it took to build everything that’s there in the first place.
Now, that’s not nothing that is huge. That’s, you know, trillions of dollars 10s of trillions of dollars, and it’s highly relevant. But most industries in most sub sectors that have decided to relocate to other countries have discovered that they’ve got shorter, simpler supply chains with a lot less of a political headache.
Okay, here is the new data. And as you can see that the number of children who are under age five has just collapsed, and there are now roughly twice as many that are age 15, as there are age five. What happened back in 2017? Well before COVID Is that we had a sudden collapse in the birth rate roughly 40% over the next five years, among the Chinese, the ethnic Han population and more than 50%, among a lot of the minorities.
And that is before COVID, which saw anecdotally the birth rate drops considerably more and before COVID, which probably raised the death rate considerably. We’re never going to get good data on death rate, or at least not anytime soon. Because the Chinese when they did the reopening, they just stopped collecting the data on deaths and COVID. And everything because they didn’t want the world to know how many Chinese died. So they don’t know.
With this data, this snapshot in time, this is official state data, it’s still probably not wildly accurate. We still have the Shanghai Academy of Sciences, which is like the biggest nerd group you’ve got in the country, saying that the country has over counted their population under age 45 by over 100 million people in the aftermath of the one child policy. And so really, what we need to consider is that that official data and at the very bottom, you need to play that up. And this last graphic kind of shows you our internal estimate of where that is.
Now, this is not official, those yellow bars probably don’t exist. But that is not what the official data is saying. This is an extrapolation from what the Shanghai Academy of Sciences is saying. Anyway, some version of this is probably the truth, which means that China aged past the point of demographic no return over 20 years ago. And it wasn’t just this year that India became the world’s most populous country, that probably happened roughly a decade ago. And it wasn’t in 2018, that the average Chinese aged past the average American that was probably roughly in 2007, or 2008.
So this is not a country that is in demographic decay. This is a country that is in the advanced stages of demographic collapse. And this is going to be the final decade that China can exist as a modern industrialized nation state because it simply isn’t going to have the people to even try. So for those of you who have business in China, you’re becoming more and more aware of the political system, you’re becoming aware that it’s becoming illegal for foreigners to even access data, data that in most countries is publicly available.
You now have on top of that, to figure out that not only is the labor force never recovered and the labor costs you’re having now are as low as they’re ever going to be. Consumption is as high as it’s ever going to be. So even before you consider the political complications, or issues with the operating environment, or energy axis, or geopolitical risks or reputational risks, the numbers just aren’t there anymore. So you have to ask yourself while you’re still there. Sunk cost of industrial plant? That’s a reasonable answer. But it becomes less relevant with every passing year is everything else catches up all right you guys take care
Peter Zeihan
Geopolitical Strategist
Commentary
Our commentary partners will help you reach your own conclusions on complex topics.
Is the US looking for a war?
8 hrs ago
Peter Zeihan
How future generations could shift US support for Israel
Yesterday
Peter Zeihan
Why election of European Commission president is so important
Wednesday
Peter Zeihan
‘Both completely corrupt’: What Americans think of Biden, Trump
Tuesday
Dr. Frank Luntz
The Chinese labor force is on the verge of collapse
Peter Zeihan
Geopolitical Strategist
By Straight Arrow News
China’s demographic situation is dire. According to projections, China’s population is likely to drop below one billion by 2080 and further decrease to 800 million by 2100. This significant demographic shift means fewer individuals will be entering the workforce, leading to a decrease in factory production.
Straight Arrow News contributor Peter Zeihan examines new China demographic figures and argues any country still doing business there would be wise to reconsider its options.
Excerpted from Peter’s June 29 “Zeihan on Geopolitics” newsletter:
Today we’re breaking down the new demographic data from the Chinese space. This will allow us to make some much-needed updates to an already bleak assessment … and spoiler alert, it’s going to get a lot worse.
China is entering its final decade of operating as a modern industrialized nation. For any foreign business still in China, those sunk costs on factories can only keep you there for so long … and it will only get worse from here on out.
Hey, everybody, Peter Zion here coming to you from Marshalltown, Iowa, my mom was a little upset that the videos I did earlier did not have a flower garden in the background.
Your topic today is Chinese demographics, we’ve gotten some new data out of the Chinese that has made the way to the UN. And so the updates have allowed us to update our assessment, and oh, my God, it’s bad.
Okay, so let’s start with this first graphic to show you where the official data had us as of a year or two years ago: this narrowing for the bottom seven age blocks is the fastest aging workforce in the world, and arguably the fastest one in human history.
This indicates that the number of new workers coming in is so small compared to the number that are retiring, that you’re having massive increase in labor costs, and from adjacent numbers that we do trust. I mean, Chinese data is always a little touch and go. But from the numbers that we do have that we do trust, which is labor costs, Chinese labor is increasing at the fastest pace of any country in any era at any time in history, including during the Black Death itself.
Since 2000, the cost of Chinese labor has gone up by about a factor of 15. While the size of the Chinese economy has only expanded by a factor of about roughly 3.5, to four. So really, really bad. The Chinese are only an industrial power today under this data, because of the sunk cost of the industrial plant that it took to build everything that’s there in the first place.
Now, that’s not nothing that is huge. That’s, you know, trillions of dollars 10s of trillions of dollars, and it’s highly relevant. But most industries in most sub sectors that have decided to relocate to other countries have discovered that they’ve got shorter, simpler supply chains with a lot less of a political headache.
Okay, here is the new data. And as you can see that the number of children who are under age five has just collapsed, and there are now roughly twice as many that are age 15, as there are age five. What happened back in 2017? Well before COVID Is that we had a sudden collapse in the birth rate roughly 40% over the next five years, among the Chinese, the ethnic Han population and more than 50%, among a lot of the minorities.
And that is before COVID, which saw anecdotally the birth rate drops considerably more and before COVID, which probably raised the death rate considerably. We’re never going to get good data on death rate, or at least not anytime soon. Because the Chinese when they did the reopening, they just stopped collecting the data on deaths and COVID. And everything because they didn’t want the world to know how many Chinese died. So they don’t know.
With this data, this snapshot in time, this is official state data, it’s still probably not wildly accurate. We still have the Shanghai Academy of Sciences, which is like the biggest nerd group you’ve got in the country, saying that the country has over counted their population under age 45 by over 100 million people in the aftermath of the one child policy. And so really, what we need to consider is that that official data and at the very bottom, you need to play that up. And this last graphic kind of shows you our internal estimate of where that is.
Now, this is not official, those yellow bars probably don’t exist. But that is not what the official data is saying. This is an extrapolation from what the Shanghai Academy of Sciences is saying. Anyway, some version of this is probably the truth, which means that China aged past the point of demographic no return over 20 years ago. And it wasn’t just this year that India became the world’s most populous country, that probably happened roughly a decade ago. And it wasn’t in 2018, that the average Chinese aged past the average American that was probably roughly in 2007, or 2008.
So this is not a country that is in demographic decay. This is a country that is in the advanced stages of demographic collapse. And this is going to be the final decade that China can exist as a modern industrialized nation state because it simply isn’t going to have the people to even try. So for those of you who have business in China, you’re becoming more and more aware of the political system, you’re becoming aware that it’s becoming illegal for foreigners to even access data, data that in most countries is publicly available.
You now have on top of that, to figure out that not only is the labor force never recovered and the labor costs you’re having now are as low as they’re ever going to be. Consumption is as high as it’s ever going to be. So even before you consider the political complications, or issues with the operating environment, or energy axis, or geopolitical risks or reputational risks, the numbers just aren’t there anymore. So you have to ask yourself while you’re still there. Sunk cost of industrial plant? That’s a reasonable answer. But it becomes less relevant with every passing year is everything else catches up all right you guys take care
Is the US looking for a war?
With conflicts, skirmishes and tensions simmering around the globe, and with the United States playing supporting roles in several of them, the question of whether the country getting involved directly is legitimate. The war in Ukraine, for example, has forced several European countries to reintroduce mandatory military service to confront the growing threat from Moscow.…
8 hrs ago
How future generations could shift US support for Israel
Israeli Prime Minister Benjamin Netanyahu addressed a joint meeting of Congress on July 24, calling for increased bipartisan support for Israel amid its 10-month war with Hamas. He praised President Biden’s “half century of friendship to Israel” and referred to Hamas as “sheer evil.” In the video above, Straight Arrow News contributor Peter Zeihan analyzes…
Yesterday
Why election of European Commission president is so important
Ursula von der Leyen has been reelected to another five-year term as president of the European Commission after a vote by EU lawmakers. Von der Leyen will now preside over a coalition that shifted to the right after recent European elections, where ultra-conservative parties won a record number of seats. In July, von der Leyen…
Wednesday
Protests in Bangladesh signal more trouble ahead
Public protests in Bangladesh against government hiring practices — and against the government’s military response to those protests — have left at least 174 dead and 2,500 jailed. Bangladesh’s people face an acute jobs and unemployment crisis, so public disagreements over hiring practices carry significant weight. The regime recently enforced a nationwide internet blackout as…
Tuesday
In US election, early polling doesn’t tell us anything yet
From President Joe Biden’s declining health to the attempted assassination of Donald Trump, there’s been a series of major political developments in the United States that might impact the results of the November election. These developments have led to renewed confusion, concern and debate regarding which candidate might win, and in the Democrats’ case, which…
Jul 19
Underreported stories from each side
Group accuses Pa. teachers union of illegally using money to back Shapiro’s 2022 campaign
8 sources | 0% from the left
Getty Images
Some House Republicans slam Vance as Trump’s VP pick: ‘The worst choice’
8 sources | 0% from the right
Reuters
Latest Stories
Congress still trying to figure out how to reduce wasteful military spending
Watch 2:29
3 hrs ago
US Navy, Air Force making waves with new weapons at RIMPAC
Watch 6:03
3 hrs ago
Israeli PM Netanyahu meets with Trump at Mar-a-Lago
Watch 2:54
3 hrs ago
Growing US nuclear power resurgence reaches the nation’s heartland
Watch 1:19
3 hrs ago
Beer from the sun, other solar thermal projects get government funding
Watch 2:04
3 hrs ago
Popular Opinions
In addition to the facts, we believe it’s vital to hear perspectives from all sides of the political spectrum.
Trump has an excellent opportunity with Black voters
9 hrs ago
Star Parker
Don’t fall for GOP’s cheap racist attacks on Kamala Harris
9 hrs ago
Dr. Rashad Richey
Americans must reject Trump to defend our democracy
Yesterday
Jordan Reid
Why all the changes in European parliamentary governments?
Wednesday
Newt Gingrich