Relaciones Internacionales – Comunicación Internacional

China’s internal challenges

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Its economic growth is likely to slow dramatically as its population ages and labor force shrinks

People are justifiably worried about China. It is wrecking Hong Kong and has lost international trust in the process, which makes it difficult to form future deals with its leadership. China’s divide-and-conquer diplomacy abroad, particularly toward countries smaller than the U.S., is aggressive and immature. Xi Jinping’s statist economic strategy has returned to the Maoist model, putting private enterprise under the thumb of the Communist Party at home and exploiting foreign trade relationships.

I support efforts to call out such outrageous behavior—and to work with partners and allies, who largely agree with us about this—to develop the most effective approach possible to deal with it.

Americans long underestimated China’s progress and its leaders’ ambitions. I reluctantly accept that today’s China is different from the one I once worked with constructively. But as we deal with the present, we should also consider future relations with a country that faces significant emerging internal structural problems. China’s next 20 years are unlikely to repeat its past 20.

Take the labor force. Growth in gross domestic product is a factor of a country’s labor-force and productivity growth. Deng Xiaoping once told me how the ingenuity and hard work of the Chinese people would power huge advances, given market liberalizations. That combined with an explosion in the pool of available workers—a youthful population bulge, plus migration from farms to cities. China’s GDP grew from 11% of the U.S.’s in 1997 to 63% two decades later, in the process lifting hundreds of millions out of abject poverty. But the labor force of Mr. Xi’s China is now declining—in contrast to the steady, immigration-driven growth of the U.S.—and is projected to lose 174 million workers by midcentury. To borrow a phrase from the political economist Nicholas Eberstadt, this will “bound the realm of the possible” in the Chinese economy.

 

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