I struggle to get my head around the size of the Chinese property collapse & it's global consequences.

[StrawberryMarble]

Is anyone else following this? Because it will affect us for sure down the line. 65 MILLION properties in China are in a limbo of being half built & the developers have run out of funds. This is way way bigger than the sub-prime crisis in the US. Blocks of flats are being demolished in their thousands. The Chinese government is pumping trillions in to keep the economy afloat. I think we're in for an unprecidented global recession that will bite longer & harder than ever before when you add in the cost of covid and the energy crisis.

On a global level, isn’t there an upside to a decline in population?

in some ways yes but it's going to be a huge demographic shift to have countries with high numbers of older people. I assume there will be a shift of power to younger countries.

I've never understood this either. Surely just breeding more and more generations just means we are going to run out of resources eventually?

But people wouldn't keep breeding more & more as global population is predicted to peak soon.

And yet we did our best to put off our most (on average) highly educated and qualified group of immigrants from moving here by being xenophobic and ungrateful for their contribution. Go figure. 🙄

Yes. Longer term of course it is better for the global population of humans to be lower. The question is how you manage the transition - which will for a time inevitably involve have a higher elderly population than young and able population who can care for them and provide for them - without economies and societies collapsing.

From an environmental perspective, populations should reduce as fast as possible. From an economic perspective, the faster it happens, the more expensive and difficult it is to make the economy function without totally screwing over the young or having a complete economic collapse.

@JohnRokesmith this is not correct, @Brahumbug and @Justanotherlurker also spotted this but wanted to post link for you that you might like.

UN world population projections estimate that the Chinese population will fall from around 1.4bn in mid 2020s (the expected peak) to 1.3bn in 2050. It will then likely fall faster and would drop to around half in 2100 if current birth rate projections are maintained. However, a lot could change the 2100 projection. You need an average of 2.1 births per woman to maintain the size of the population (the replacement rate). Anything above that and it will grow. Below that it will fall. Degree above and below determines rate of change. Graph attached - look at the median level of the estimate, but you can see that even just a 0.5 increase in average fertility ratio is enough to significantly moderate that trend. Source Here

By comparison a faster drop is seen in the working age population from around a peak of 900m in mid 2020s to around 700m in 2050. It’s much less likely that this can be moderated in anyway now because it will take longer for birth rates to impact the demographics, but this is the trend that is most worrying.

Here you can see the proportion of the population over 65 in China doubles from around 15% in 2020s to 30% in 2050, this is RAPID population ageing. In comparison the proportion of people of working age 20-64 shrinks from a peak of near 65% around 2010 to 55% in 2050. this is also very significant.

You can play around with the stats on the site, it’s super interesting.

Again sorry to disagree with you but immigration policies have been shown time and time over to make relatively little impact on overall population demographics unless they take place on an absolutely industrial sized scale. They also leave a country facing the problem of what to do when those workers retire. You’d have to continually maintain that level of immigration in the long term if you are to seek an influx of workers in the short term. Most will settle and build lives and families here, they don’t return back to home countries as soon as they retire.

For those interested in the UK, our total population is expected to continue growing then level off at around 72m in 2050 before declining slowly after that. BUT… the make up of it will change significantly as we’ll go from around 18% of the population over 65 to 26%. That’s smaller change than China but enough to have a big economic and fiscal impact. It’s why State Pension Age is going up and State Pension income is going down. Without change in birth rates, that proportion could go up to over 30% by 2100, meaning we become a much less productive economy with far higher levels of dependency that result in less economic resources per head of the population if we continue to assume that resources are generated largely by the productivity of the working age population.

This has been talked about for ages in the mainstream news. Here are a few examples:

www.bloomberg.com/news/articles/2022-02-18/crisis-in-china-s-property-industry-deepens-with-no-end-in-sight

www.theguardian.com/world/2022/mar/17/china-property-shares-soar-on-beijing-stimulus-despite-continued-debt-crisis

www.bbc.com/news/business-59286413 (this article is from 2021)

www.economist.com/china/2021/09/04/chinas-bid-to-stabilise-its-property-market-is-causing-jitters

www.foxbusiness.com/economy/beyond-evergrande-chinas-property-market-faces-a-5-trillion-reckoning (article from 2021)

What an interesting thread. Thank you OP.

To illustrate, there are currently around 12.5m people over 65 in the UK, about 18% of population of c. 68m (rough figures only) . That figure is projected to grow to around 18m people over 65 in 2050 as baby boomers retire and grow older. By comparison the number of people 20-64 stays at around 38m, representing the fall from 58% of pop in 2020 to 54% in 2050. People aged 0-19 drop from just under 16m to around 23% in 2020 to around 14m or 19.5% in 2050.

Given that this number of people over 65 will not change (bar any massive change in life expectancy), you can see they’re representing an ever growing share of total pop as the working age group stays same over time and younger ages shrink. You'd therefore need a population of around 100m in order for the ratio of 65+ to everyone else to stay the same. The increase in state pension age will absorb a bit of that, but I can’t quickly get stats that incorporate those changes. Either way, that’s not a drop that can be compensated for by immigration.

The way immigration plugs the gap is adopting a model seen in places like the middle East and Asia where individuals from countries such as Indonesia, the Philippines etc go over there to work but have no rights to citizenship, leave to remain etc. The employer pays levys to hire them and has to have health insurance for them. Of course it's not without its problems but it's an option.

I expect China will do something like this if they decide immigration is needed. I can't imagine an enforced euthanasia age would be accepted by the Chinese population but then I wouldn't have thought a limit on how many children you could have would be either.

I was going to post something similar to this.

Although we do have an aging population, we are very different to China.

I also think there will be big shifts in where people want to live due to global warming and environmental factors too. Temperate weather and plentiful rainfall will become more desirable than baking in heat.

The Rest is Politics podcast - Rory Stewart keeps saying we are in for a ten year global recession.

How many years will it take the mushroom of elderly to die? Are they looking at 10yrs, 20yrs…? After that will the population stabilise again at the lower rate? Less elderly to care for and perhaps an increasing number of children once more?

Given that this number of people over 65 will not change (bar any massive change in life expectancy), you can see they’re representing an ever growing share of total pop as the working age group stays same over time and younger ages shrink.

How is the NHS & social care going to cope with this when you look at the state we are in now. Plus will young people want to work into their late 60s & have higher taxes & little chance of owning a home?

It does yes. Only people like Musk think that falling populations are a bad thing, cause he was never going to starve was he?

Do you mean in China or UK?

In both circumstances we are looking at at least 40 years and that is only assuming that the birth rates stay stable between now and then (or increase). If birth rates reduce further then the problem continues as the younger population always grows at a slower rate than the the previous cohort did at the same age (or it declines faster), therefore population ageing continues.

If you’re talking cohorts, the end of the baby boomer generation was born in 1964 meaning they are around 58 (to 76) today. The expectation in policy is that most adults will spend a third of their adult life in retirement, life expectancy is around 80 in the UK so there is at least another 30 years before trends could even start to be reversed bearing in mind that the proportion of people under 65 is shrinking and it would take at least another 20 years for children born today to reach working age. So if more children were to be born now you could start to see the effect in around 30 years time but the longer low birth rates continue then the longer it will be. Average life expectancy is stalling or falling in some cases which will also slow down future increases but not dramatically.

What kind of projection are you looking at? World Bank projects Chinas population as declining from 1.4bn to 1.3bn between now and 2050.
databank.worldbank.org/reports.aspx?Report_Name=China-Population-Projection-15-50&Id=61621b1c

This is to be expected really. It’s a good thing because we need global population to stabilise.

Due to the one-child policy & more recently a marked reluctance for young women to marry & have children, they're beginning to experience a collosal shrinkage of population.

China has a three child policy. The one child policy was scrapped in 2015 for a two child policy, and then that was scrapped in 2020 for a three child policy. It’s more their extremely strict immigration controls affecting their working age population than the # children policies.

Like us, when the much smaller younger demographic has to support the giant mushroom of elders, that too will have an impact.
Thats not what our demographics look like. We have a few bulges but no “giant mushroom of elders”. The bulk of our population is still working age.

@goshy
How is the NHS & social care going to cope with this when you look at the state we are in now. Plus will young people want to work into their late 60s & have higher taxes & little chance of owning a home?

Exactly the problem. There are things that can be done, raising state pension age and lowering state pension income is one way of reducing burden on the state, increasing tax take and redistributing resources to other areas (or mitigating need for debt). It’s also why the previous govt tried to put more preventative health targets in place but didn’t really get anywhere. People are living longer with more illnesses than ever before in part thanks to advances in medicine which means they are able so survive more than in the past. Those treatments are also expensive. There are other options like increasing automation so that you need less people to achieve similar outputs in economy, lots of different levers, but quite frankly no one has a grasp of it. It’s a problem not least because there’s no govt department to take ownership of demography, instead it’s subject to constantly competing interests from different departments who don’t adequately work together to achieve long term goals… specifically Treasury, DWP and DHSC.

Btw @goshy i don’t think people will have much of a choice which is not necessarily unreasonable when you look at how much life expectancy went up relative to retirement age over recent decades. It’s just that the baby boomers had it good because there were so many of them that they could easily support the generation above them. Not so for us as baby boomers didn’t have enough babies to keep up that trend!

re home ownership things are changing and the proportion of young people buying is going up, don’t forget that many more will be set to inherit property wealth etc so that will make a difference too.

@BluePassportsAreBollocks Thats what makes me panic, the fact the gov don't seem to be doing much about it. I personally don't think expecting young people to work till they drop is the solution. They need to feel part of the social contract & alot are already disillusioned.