[Puffer Fish]

China Has 1 Major Issue That They CAN’T Fix! Critical Economic Wave CRASHING In!
The Money GPS, March 15, 2018

With lower birth rates, the population of China is aging, with a lower ratio of young people. This is going to present demographic problems, similar to what Japan has already experienced. There will be fewer people to work and take care of the old. On the other hand, China already has too many people, and it may ultimately raise the standard of living if the population shrinks in the long-term. So it seems China got itself into a demographic dilemma from which there is no easy way out.

This almost assuredly is going to lead to further depopulation of the countryside and continue to cause migration of people from China's less populated West to its overcrowded cities in the Eastern region of the country, since the Eastern provinces are wealthier and more urbanized, and are the places where the lower birth rates are most pronounced. That may not be such a good thing for the country either. It will just further raise the cost of living, increase overcrowding, and there are plenty of old people in the rural Western provinces who have no one to care for them because their children migrated for jobs in the East.

The end of the Chinese miracle | FT Features
Financial Times, March 9, 2016

[Fasces]

It's wishful thinking.

China has a productivity per labor hour figure about a third of Japan and a quarter of the US. They're world leaders in AI and automation. China could lose up to a billion citizens and still be as economically productive as it is today just by rising to match the productivity per labor hour of most Western states, something that can be accomplished easily.

[Puffer Fish]

It's wishful thinking.

China has a productivity per labor hour figure about a third of Japan and a quarter of the US. They're world leaders in AI and automation. China could lose up to a billion citizens and still be as economically productive as it is today just by rising to match the productivity per labor hour of most Western states, something that can be accomplished easily.

That is an excellent argument, that is difficult to argue with, but I think it is more complex than that, and I think you are still mostly wrong (or maybe "half wrong").

China is very dependent on its exports, and maintaining a positive balance of trade (a trade surplus, selling more consumer goods than it buys). As costs have risen in China, a lot of production that took place in China only 5 or 10 years ago is already moving to other countries, like Vietnam.

A lot of the "productivity" in some countries is based off occupying a niche market and selling to other countries, or foreign ownership in other countries, rather than how you would conventionally imagine "automation".
For example, if every other country in the world had the same automation capability and worker efficiency as Japan, Japan would no longer have as high of a "productivity" as it now has due to exports.

So the fallacy of composition comes into play. The traits of a country do not exist in isolation. You cannot necessarily try to copy one country's success in another country and expect that to change nothing outside. In the case of China, obviously China is much larger, so I do not think you are going to be able to reproduce that increase in "efficiency" the same way.

[wat0n]

It's wishful thinking.

China has a productivity per labor hour figure about a third of Japan and a quarter of the US. They're world leaders in AI and automation. China could lose up to a billion citizens and still be as economically productive as it is today just by rising to match the productivity per labor hour of most Western states, something that can be accomplished easily.

Tripling labor productivity is not "easy", even with automation. AI is not a magic wand that solves all your productivity problems overnight.

[Puffer Fish]

Tripling labor productivity is not "easy", even with automation. AI is not a magic wand that solves all your productivity problems overnight.

Yes, it is very ironic that someone who began their post with "It's wishful thinking" actually had a message that was very "wishful thinking".

[Fasces]

Tripling labor productivity is not "easy", even with automation. AI is not a magic wand that solves all your productivity problems overnight.

China would only need to triple labor productivity if they lost hundreds of millions, which they're not, and it's easier to tread already walked paths, especially when you're the world leader in automation research and logistical infrastructure, which they are.

Realistically, over the next few decades, China can bridge the gap between its low population growth rate through improvements in labor productivity and immigration, the latter of which the CCP is in favor of (but has to combat anti immigrant sentiment among its people). Japanese stagflation is the worst case scenario - dreaming of a major economic collapse or end of Chinese economic power is wishful thinking.

[Puffer Fish]

China would only need to triple labor productivity if they lost hundreds of millions ...

Realistically, over the next few decades, China can bridge the gap between its low population growth rate through improvements in labor productivity and immigration

I think the immigration angle is very unrealistic. Yes, there is plenty of internal immigration going on in China, but to bring in workers from outside China, especially from a distant region, they are not going to like Chinese. I think the Chinese society and leadership must know this on some level, even if the technicalities of their Communist ideology make them not want to openly admit it.

But like I explained before, China is in a "damned if you do, damned if you do not" situation. Whether they increase population, or allow it to decrease, they will not be in a good situation.

It is in a way a little like the collapse of a pyramid scheme. They became reliant on population growth and generous ratio of young to old, but that type of population growth just could not go on forever.

As I explained to you before, China's high productivity has been due to a niche market, which was the world's cheap supply of manufactured goods. When your productivity is due to a niche market, it is not so easy to just "triple productivity".
If you want to look at it this way, ask yourself what China's real productivity would have been if it had excluded the value of exports. Tripling the productivity of whatever that would be might be feasible.

Neither will China be able to do with its economy what many other smaller Asian countries did, because of China's size. China would not be able to export the huge volume to increase its productivity like that. (Since the world market would not be that big) And we have to admit, all these other Asian countries that drastically increased their productivities were very export driven.

So I believe you are simply incorrect. It will not be so easy.

[Fasces]

As I explained to you before, China's high productivity has been due to a niche market, which was the world's cheap supply of manufactured goods. When your productivity is due to a niche market, it is not so easy to just "triple productivity".
If you want to look at it this way, ask yourself what China's real productivity would have been if it had excluded the value of exports. Tripling the productivity of whatever that would be might be feasible.

This isn't the 90s. China doesn't just manufacture cheap goods.

So I believe you are simply incorrect.

Good, then I must be on the right track.