Interesting as to what this means for the Thucydides Trap.
It’s already touted as a kind of forced dynamic pushing two great rivals, the incumbent and the upstart, to an even greater war.
A stagnant and free-falling, aging population may give the Trap a steroid injection on the Chinese side, though I tend to see the Chinese (and Russians) as more prudent and risk-averse decision-makers than those in Washington.
The PLA and hawkish civilian elements may decide to escalate suddenly, realizing that the time before the devastating internal demographic crisis in China is too close, the Indians are poorer but demographically “healthier” and with a decent, albeit weaker military, and the US still has military capabilities of note despite the wokeism. The calculation in this case would be that the relative power gap between a much less ally-rich China (BRICS is still too economic and not military-focused) and the US-led bloc will expand because of China’s demographics and the opportunity to reverse this quickly must be taken. India is in BRICS, closer to Russia but militarily mildly to moderately antagonistic towards China at this stage.
China's labor pool has actually been rising sharply in terms of quality. They now have many of the top STEM universities in the world and have been pumping out nearly 5 million STEM grads per year. Most of the Deepseek team are 20-somethings, and many of the top members aren't even graduates of top Chinese universities.
What the China demographic doomers miss is that their numbers are
still gigantic in absolute terms, this is a country of 1.4 billion people. And they still have a huge untapped labor pool in the form of ~450 million rural population that they can "activate" by bringing to the cities. They can also raise the retirement age, currently the lowest in the world (60 for men, 50 to 55 for women). They're going to wait until youth unemployment comes down a bit as older Xers and younger boomers retire.
Chinese leaders are very competent and plan way ahead, they have 5,10, 25 year plans that have, to date, all exceeded goals set. Some of the last ones were to catch up in AI and to be leaders in battery and EV industry, which they have set about a decade ago. Most of these leaders have STEM backgrounds and understand how demographics work and can solve differential equations on which population models are based, something that less than 5% of political leaders in the US, Canada or Europe could do.
As I've mentioned before, they want a "soft landing" of around 800-900 million population at the end of the century. And contrary to countries like Japan, S Korea, Germany, US, Canada etc they can provide economic conditions that will raise fertility rates such as low housing, healthcare, transport, daycare costs, China has today the most accessible housing costs for young families of any industrialized country.
But beyond that, what the Chinese have that these other countries don't is cultural levers to make child rearing and family life cool and trendy, which goes 180 degrees against the kind of social engineering young women in the West and Japan/Korea are subjected to. They can also actively steer women towards matrimony by reducing access to young women in the workplace or even paying them to stay at home and raise kids. They would have no qualms discriminating against young women in the workplace if it's deemed to be for the good of the country.
This article agrees with my analysis, which I have gathered by talking with Chinese former college classmates.
In discussions about China’s economy, the issue of demographics comes up quite a lot. In 2022, China’s population began to decrease (and
asiatimes.com
As every labor economist
knows, a better-educated workforce is a more productive workforce. The Chinese workers that will retire over the next quarter century — the Gen Xers and older Millennials — are not very highly educated. The workers that will replace them — the Alphas — are very highly educated. That will compensate for much of the loss of the working-age population.
Between welcoming a big youth cohort, raising the retirement age, and sending a lot more kids to college, China should experience few problems from the gentle demographic headwinds of the next two and a half decades.
1 Its leaders still need to worry about the long-term demographic challenge after 2050,
but most of its rivals are in even worse shape.
All in all, the narrative that demographics will tip the balance of economic and geopolitical power away from China in the next few decades seems overblown and unrealistic. That means more competition for the rest of the world to worry about. But it also means that China’s window of opportunity to act on the world stage won’t close anytime soon.