An economist is warning that the source of China’s economic prowess, its abundant labor force, is heading towards collapse. The country’s one-child policy, initiated in 1979 to offset what was seen as an overpopulation problem, will reduce the country’s labor force by 10% by 2030.
Greg Peel, writing for the economic news service FNArena.com, explained that according to United Nations statistics, the percentage of people over 60 years old is expected to double by 2030. In the same period, the working age population will reduce by a tenth. “GDP growth will suffer as a consequence,” he states. “Since the dependent population is likely to live on accumulated wealth, the average savings rate must fall.”
Peel explains that China's decreasing labor force will put the country at a disadvantage when compared to other Asian countries that still have normal population growth rates. “Population policy will now set China apart from other developing Asian economies where relative labor abundance will increase, as will relative capital returns.
“If there is no change in population policy, there will have to be more stringent improvements in the investment environment in order to secure global foreign investment,” he concludes.
(This article courtesy of LifeSiteNews.com.)
