So, a couple of weeks ago this article appeared on the Business Spectator. It contained a couple of graphs which I found very interesting and have reproduced below.

In the article ‘An ageing Asian will weary Australia’, author Robert Gottliebsen argues that China and Japan have rapidly ageing populations. As such the Australian government and Australian companies are short-sighted in setting strategies which rely on increasing Asian growth and demand. In short, the predicted wealth of Asia will be curtailed by a severely diminished workforce.

Sounds like a good story on the surface, but if you delve deeper into the details, it looks like Mr Gottliebsen has intentionally missed out on some details. The source of the data quoted in the graphs is the UN, and a quick search reveals this UN page which contains data on predicted population ages for each country.

In the report, the UN describes the problem of ageing populations as a ‘global phenomenon’ which ‘has profound implications for many facets of human life’. While some countries are more ‘aged’ than others, the report data reveals that it is predicted that by 2025 Australia and the USA will both have 24.8% of their total population over 60 years of age. This is compared with 19.5% for China. In fact, the ‘ageing index’ which is the measure the UN uses, puts China at a better rating than not only the USA, but most of Europe. Japan does have a greater ageing issue than all of the previously mentioned countries, however the fact remains that the ageing issue is global.

So given the facts, lets put aside the ageing issue for the moment and assume that it will effect countries equally. Does China still have potential for further economic growth? The news is filled with stories of incredible Chinese economic growth and how rich the country is already. Well, rather than writing a book arguing my case, lets just look at the per capita GDP graph below as I think it alone conveys a compelling story.

The reason why I’ve included Singapore and Hong Kong as comparisons is because both cities have populations of overwhelmingly ethnic Chinese. As much as some of the inhabitants would like to deny it, but each of the countries share similar sets of beliefs, philosophy, language and culture. This is not to say that there are other enormous differences in say resources and history, but the graph provides insight into how much more growth there is to be had from China.

Robert Gottliebsen is certainly entitled to his view. But I question why he has so obviously picked out the issue of ageing populations as his primary counterargument to the Asian growth story, when it is in fact a worldwide problem. Chinese economic growth and the potential for further growth, should be convincing enough.

2 Responses to “Questioning Asian growth”

  1. Jolly says:

    I didn’t know that you are now a business writer. I think that the Business Spectator has reason to worry…

    I think that you have to look deeper into the article and see that China will follow the west into a society where the elderly make a larger part of the population than today. However, in most of Robert’s articles he makes some pretty bold assumptions and this is no different.

  2. Dominique says:

    I am with Jolly on this one.

    Regardless of whether the writer conveniently leaves out that the rest of the world is getting older, China is facing this as well. Don’t think you can push it aside that easily with saying it will affect everyone anyway, so let’s not worry about it.

    It would have been interesting to push the argument a little bit further and try to understand how the forces at work (the economic upside on the one hand and the ageing population on the other hand) will affect each other and what the end game may look like 20-30-40 years on.

    Not sure if there is more content here than Wikipedia, but see from your keywords at the bottom that the scope of your blog is as broad. Can your next blog post be about the politics in Jiu Jitsu or how technology influences MMA?