The new rules: globalization’s massive demographic bet

Thomas PM Barnett writes:

By calling the Chinese out explicitly on their currency manipulation in his concluding address to the G-20 summit last week, President Barack Obama may have torpedoed his relationship with Beijing for the remainder of what China’s bosses most certainly now hope is his first and only term. Burdened by a Republican-controlled, Tea Party-infused House, and bathed in hypocrisy thanks to the Fed’s own, just-announced currency manipulation (aka, QE2), Obama seems not to recognize either the gravity of his nation’s long-term economic situation or the degree to which his own political fate now hinges on his administration’s increasingly stormy ties with China.

Here’s the larger picture: Asia, anchored by China, is now the global economy’s center of gravity when it comes to deployable savings. As Europe heads into retirement and the U.S. refuses to come to grips with its unsustainable trajectory, China stands tall thanks to its capacity to spend and invest — even as that capacity seems woefully insufficient for the bevy of historical tasks at hand. Beijing must already see to the care and feeding of 22 percent of humanity, the bulk of whom remain impoverished by anybody’s reasonable standards. But in addition, China is now expected to cover the spendthrift West’s need to boost exports, while also serving as income-elevating engine for the rest of the world’s developing economies — largely through the Middle Kingdom’s ravenous resource demands.

And if all that wasn’t intimidating enough, China’s demographic clock is ticking like no other nation’s in human history. Already losing its cheap-labor advantage right now, China is set to stockpile elders from here on out at a pace never before witnessed. By 2050, it will have more non-working old people (400 million plus) than America’s total projected population (400 million). At that point, the U.S. median age will still be just below 40, while China’s will be closer to 50. It took Europe a century for its elder population to gradually rise from 10 percent of total population to the 20-percent level. America’s still-unfolding journey along the same path will run about six decades. But China will have 20 years, if it’s lucky.

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One thought on “The new rules: globalization’s massive demographic bet

  1. pabelmont

    It looks serious as all get out, but what is “globalization’s demographic bet”?

    I have been wondering (warning?) about the CONFLICT BETWEEN [1] the need for humankind to stabilize (or reduce) the size of the human population (to avoid resource failures such as water insufficiency, to slow global warming, etc.) and [2] the apparent need for “growth” by capitalism.

    Is this what is meant?

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