“China’s economy will never surpass that of the United States!”Many people will be angry and upset when the saying goes to the “Powerful country.”. But that may well be the reality of the future. Yi Fuxian based on the trend of population growth in the forecast, in the national and local are repeatedly successful.
Before President Biden was sworn in, former White House official Ryan Hass cites the work of Yi Fuxian, a demographer who has long worked on China’s demographic landscape, as an important reference for the Brookings Institution’s publication, the future of U.S. policy toward China: Recommendations for the Biden Administration.
Yi Fuxian is a senior scientist and author at the University of Wisconsin, Madison. The article, which he published in the english-language South China Morning Post in 2019, was titled “Worse Than Japan: How China’s looming demographic crisis will destroy its economic dreams.”.
An important reason for the deterioration in us-china relations, argues Yi, is a strategic miscalculation caused by incorrect Chinese population data. In an exclusive interview with the Voice of America, he was asked to share his insights on the causes and consequences of China’s demographic and economic power and its relationship with the United States.
China’s rising profile after high-speed development raises U.S. alarm. USS Theodore Roosevelt and the USS Nimitz aircraft carrier 2021 during a two-carrier joint exercise in the South China Sea on Feb. 9
China’s rising profile after high-speed development raises U.S. alarm. USS Theodore Roosevelt and the USS Nimitz aircraft carrier 2021 during a two-carrier joint exercise in the South China Sea on Feb. 9
Reporter: You argue that the United States exaggerated the Chinese threat. Why?
Yi: I have been studying the relationship between China and the United States for more than 10 years, and this view of China’s “Non-threat theory”has existed since the first edition of my book “The empty nest of Great Powers”was published in Hong Kong in 2007. At the time, China’s economy had been growing at 10 per cent for a long time, and the overall thinking was that it would soon overtake the US. In 2011, the mainstream even went so far as to suggest that in 2032, China’s economy would be twice the size of America’s. There was a lot of excitement at home that China was on its way to becoming number one in the world.
I thought China was a Japanese sprinter, like South Korea and Taiwan, and the United States was a long-distance runner. It’s not surprising that sprints can temporarily outpace long-distance running, but it’s impossible to keep them at a high speed. What’s more, China’s population is aging rapidly, and the labor force began to shrink in 2013 and 2014, while the U.S. labor force will not shrink until 2050.
Elite scholars in the United States rarely analyze China’s population data, much less the actual data, because of the flood. In My 20 years of research, I’ve found that National Population and Family Planning Commission, National Bureau of Statistics of the People’s Republic of China, local education authorities, local hukou authorities, and hospitals all exaggerate the population figures. As a result, estimates of future labor, consumption, productivity, innovation and other key economic components are exaggerated, leading to future economic growth and national power are also exaggerated.
Reporter: you say, “China’s economy will never surpass that of the United States.”Where does your confidence come from?
Yi: Remember When I went to China in 2016 to attend the Bo'ao Forum and told the New York Times that China’s economy could never surpass that of the United States, presumably that was interpreted as me singing China down, so I was banned. At that time, the Chinese public opinion field was a “Great, my country”cheers, and my voice is a great blow to China.
In the final analysis, I have always believed that the main body of the social economy is the population, and only with the population can there be a series of economic activities such as production, consumption and innovation. China’s rise is driven by population. In the 1979 reform and opening up era, the median age in the 1980s was only 22, compared with 30 in the United States. China’s economy could do well with a little discipline, and so it is. It was a young China against a middle-aged America, and it was inevitable that the economic gap between the two countries would narrow. But China’s labor force began to decline around 2014, with the median age passing that of the United States by 2018, now 42, compared with 38 in the United States. If China stabilizes at a fertility rate of 1.2 children per woman of child-bearing age, the median age in China will be 49 in 2035, compared with 42 in the United States; by 2050 it will be over 56 and 44 in the United States. Here’s a look at who has the upper hand in sustainability in both the US and China.
I think in about 2030-35, China’s demographic data will be inferior to the United States in all respects, meaning that the economic growth rate will begin to be lower than the United States around 2035.
Reporter: a few days ago, CEBR, a British think-tank, said that China’s economy would surpass that of the 2028, which won the approval of the media and some experts, and predicted that in the future, China’s per capita GDP would reach 50 percent of that of the United States, even 70% . What do you think?
Yi: I don’t think so. For the economy as a whole to overtake that of the 2028, that would mean annual growth of more than 7% over the next few years. In fact, China’s recovery from the 2021 may exceed 7 percent, at most, and no other country has been able to exceed that number in a year.
As I said in the 2000s, 2012 will be an inflection point for China’s population as well as the economy, and that is that economic growth will begin to slow. No one believed it at the time. Sure enough, in 2012, China’s economy began to slow from 9.6 percent in 2011 to 6.1 percent in 2019. In this regard, the investment community only looks at one or two years of data, I will look at more than 10 years.
As for their GDP per capita forecasts, I disagree. China’s per capita GDP is now one-sixth that of the United States, and it is unlikely to climb to half or more. Japan’s GDP per head, once 1.5 times that of the US in 1995, has fallen to 61% by 2020 and is likely to fall below America’s 40% . South Korea and Taiwan, which had been closing the gap with the United States, have been stuck at 42 percent of American GDP per capita since 2011; South Korea, which was around 50 percent of American GDP in 2011, has also been stuck. Per capita income levels in these places are likely to continue to fall below 30 per cent of US levels. The European Union was 76 percent of the United States in 2008 and is now 53 percent; Germany is Europe’s leader, whose per capita share was 94 percent of the United States in 2008 but fell to 71 percent in 2020; Italy is 84 percent of the United States in 2008 and 51 percent in 2019; and Portugal and Greece have the same problem. These are just a few examples.
Reporter: these countries or entities fall into a similar model, is from chasing the United States to lose horsepower, and then pull away from the United States, why such a similar phenomenon? Will China also fall into this model?
Yi believes that demographic factors are at the heart of economic growth. The picture shows a newborn baby in a hospital in Huai'an, Jiangsu Province (photo taken on May 7,2007)
Yi believes that demographic factors are at the heart of economic growth. The picture shows a newborn baby in a hospital in Huai'an, Jiangsu Province (photo taken on May 7,2007)
Yi: aging is the biggest problem. Europe, Japan and other countries around the world, because of this problem and the gap between the United States began to grow. These countries have crossed the Middle Income Trap but are falling back into the Middle Income Trap trap of ageing. I’ve always said, for example, that no doctor has ever diagnosed that a patient is dying of old age, but of all kinds of diseases, like heart disease, cancer, obesity, and so on; in Germany and Japan, where one person has cancer and the other has a stroke, the root cause is aging.
China’s fertility rate was already lower than that of the United States in 1991 and lower than that of Japan, Germany, Greece, Portugal and Italy in 2000. As a result, GDP per head is unlikely to reach 50 per cent of US levels.
Aging is a gray rhinoceros for China; the new crown epidemic is a black swan for the United States, a year away. Gray Rhinos are long. They can’t escape. Now that the United States is facing a black swan, many pro-chinese are calling China’s system superior, but it’s really only a temporary sprint advantage for China. An aging population, declining consumption, a declining economy, declining innovation, a shrinking labor force, and a declining manufacturing sector are the general direction for China.
Q: What do you mean by China’s false population figures?
E: that’s irrigation. In 2000, census statistics showed that China’s fertility rate was only 1.2 and the number of births was 14.08 million. But a director of the family planning commission said such a low figure was out of the question and inflated it; the commission even announced that the figure would rise to 2.1 once family planning was relaxed, leading to an unlimited expansion of the population. After the 2010 census and the 2015 mini census, the Commission continued to push up the fertility rate.
Before the introduction of a full second child in 2016, the Family Planning Commission predicted that 47 million children would be born each year after the second child was born. In 2015, it said that while it could not reach that number, it could reach 22 million. In fact, the birth rate in 2016 was much lower than expected, at just 1.24, that means 12 million babies are born. At the time, with the opening of the 19th party congress in 2017 to determine whether the National Population and Family Planning Commission existed or not, the commission, in order to continue its existence, published a birth rate that was in line with expectations, saying 18.46 million births would be born in 2018. In fact, in 2018, when the National Health and Family Planning Commission was abolished and the real birth rate was revealed, the government found that only 13.62 million babies were born that year, far fewer than the 18 million or so previously forecast.
At the time, the National Bureau of Statistics of the People’s Republic of China’s data came from the family planning commission, and the head of the Population Association of China was the director of the Family Planning Commission. The Deputy Director of the National Bureau of Statistics of the People’s Republic of China, who was in charge of the census, was generally the vice president of the Chinese Population Association, under the leadership of the National Population and Family Planning Commission, everyone sets the numbers as they need to.
In addition, the local education bureau has also “Expanded”the figures, as education funds are jointly funded by the central and local governments, with the central region contributing 60 percent and the western region 80 percent. Students who overreport can receive more central funds. Children born in 2000 went to primary school in 2006, when the number of births, which had previously been estimated at 14.08 million, became 17.29 million. By 2014, these children entered the third grade, the funding has been issued, there is no need to hide so much, their number fell back to 14.26 million. By the age of 15 in 2015, that number had shrunk further to 13.5 million.
The health care system is also hydrated. Before 2008, farmers had to pay for their own children. After the government set up a partial insurance system, farmers had insurance and fees for their children, so hospitals and administrative agencies fabricated data and claimed funds. Health Commission do not know how many people were born, they can not control the number of births in so many hospitals, birth certificates simply can not control.
During the 2010 Hukou Reform, there were no restrictions on people’s access to the Hukou system. Many people bought and sold birth certificates, had double or even multiple hukou, and the number of people was made up. The Public Security Bureau’s household registration data falsification is even worse than the statistics bureau’s, because there are more than 20 kinds of benefits associated with household registration, including purchase discounts. Zhengzhou has a small police station, a year in more than a thousand false account. For example, John Doe had a hukou in Zhengzhou, and then used placeholder name’s name to buy a hukou in Guangzhou, John Doe, placeholder name are social security, can receive two social security, simply can not be found.
Between 2000 and 2019, the National Bureau of Statistics of the People’s Republic of China estimated that China added 130 million people, while the public security hukou system showed an increase of 170 million. My guess is that the number of Chinese born in 2018, around 10 million, has already started to decline, but the National Bureau of Statistics of the People’s Republic of China says 15.23 million, an increase of 5.3 million, and the number of registered permanent residents shows an increase of 9.24 million.
Reporter: You Mean, the demographic factors that determine China’s rise yesterday, today’s Turning Point and tomorrow’s trend, so in this game, how do you look at the demographic situation in the United States?
Yi: the fertility rate in the United States has been higher than that of major European countries such as Britain and France for more than 100 years. It has also been the highest in the developed countries for decades. After World War II, there was a baby boom in both Europe and the United States, but the peak in the United States was even higher, which was crucial for the development of the United States in later decades.
America’s fertility rate fell in the 1960s until 1976, when it was 1.74, lower than Europe’s. If that had been the trend, the United States would be in recession by now. Since then, however, the United States has encouraged fertility, especially after Reagan took office and introduced a series of policies that pushed the fertility rate back up to 2.0 in 1989 and remained around 2.1 in 2007. The European Union, by contrast, slipped from 2.06 in 1976 to 1.65 in 1989 and 1.51 in 2007. In 2005, Japan in Asia also fell to 1.26. In the US, Europe and Japan, the United States is the highest.
But America’s dominant population, which has fallen in the last decade or so, has now fallen to 1.65. It is estimated that the United States will remain at 1.5 for some time to come, and therefore decline, which the United States needs to guard against.
You talk about Artificial Intelligence, the role of robots in creating wealth, and I think, yes, robots can produce, but they don’t consume; consumption is a central force in economic growth. Less consumption reduces demand and makes further innovation less likely. Moreover, AI is only about innovation from 1 to N, and only human capital can innovate from 0 to 1.
When it comes to the United States and China, I think there are a lot of problems between the United States and China, but the aggravating factor -- the trade deficit -- comes from China’s one-child policy. The previous generation of one child workers were abundant and mass produced, while the one child generation spent less on consumer purchases and exported more goods than it needed, causing the United States to import more and export less, and to lose its own manufacturing.
Reporter: If You Look Back, how do you evaluate the predictions you’ve made?
Yi: on the American side, I had predicted the rise of Texas and the decline of the Midwest Great Lakes, and now it’s coming true.
I have been cited in every issue of the report of the US Congressional and executive China Commission; I have also been cited in the US Congressional China Economic and Security Review Commission. But I don’t know if they take it seriously (laughs) .
On the Chinese side, I wrote an article after 2000 pointing out that Northeast China would decline, and published many articles around 2005 concluding that China’s economic center would shift from east, north to west and south, probably the biggest shift since the Tang dynasty in the seventh century. My prediction is based largely on population. China’s fertility rate is high in the south and low in the north, high in the west and low in the east. The lowest in the northeast, the highest in the southwest, indicating the decline of the northeast, the rise of the southwest. And so it seems. What should rise, what should fall.
Northeast China’s GDP accounted for 13.7 percent of the country’s total in 1980 and 5 percent in 2020. China’s economic center began to shift from west to south around 2006.
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