The population in China is decreasing rapidly. In April, FT reported that China’s population was set to record the first contraction in five decades. The crisis could, however, run deeper.
Population getting reduced to half
The Communist nation could see its population getting halved within 45 years. The country’s birth rate has fallen to 1.3, which is way below the average of 2 needed to maintain a stable population.
China almost certainly inflates its population. Corrupt local governments and officials artificially enlarge population numbers to get more subsidies and incentives from Beijing. China’s official numbers show a population of 1.4 billion, so we are talking about the Chinese population going down to 700 million by 2066. And the CCP fears this.
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The CCP was strong because of its population. It wasn’t made to account for its human rights violations, because the West was dependent on cheap Chinese labour and cheap goods manufactured in China. But all this is going to change now.
China to lose its cheap labour
The biggest consequence is the loss of its cheap labour. With a smaller population, labour won’t be cheap or readily available. And it is not just the shrinking population that matters. China is also getting old very quickly. People are not giving birth, and the old people are not dying early due to improvements in medical facilities. By 2050, 39 percent of the Chinese population will be above the retirement age.
And when labour is not cheap, the trademark cheap production costs in China will become a thing of the past. We are talking about China losing its position as a global manufacturing and export hub.
A number of foreign firms came to China, because of cheap labour. They will start exiting when they don’t get this advantage in China, and this will cause a sharp contraction in the Chinese economy. It will no longer be one of the faster-growing economies of the world.
Separatism to pick up
When a regime loses its fundamental source of power, it turns brutal. So, CCP is likely to increase human rights abuses in Inner Mongolia, Xinjiang and Tibet, as the Chinese population decreases.
But we foresee an implosion. Ethnic Mongolians, Tibetan Buddhists and Uyghur Muslims go up in revolt and demand liberation. A weak CCP won’t be able to suppress separatism with human rights violations. See, presently the CCP can kill, loot and torture ethnic minorities because it knows that the West is dependent on China and will not do much about it.
But once the CCP is no longer a major economic powerhouse, Tibetans, Uyghurs and Mongolians will find support from others. We are talking about a Chinese collapse much like the USSR disintegration in 1991.
And the CCP will get weakened internally too. I mean right now, Xi can invoke hatred for the ethnic minorities amongst the Han Chinese people. But once the Han Chinese community itself becomes less prosperous due to its population decline, CCP will lose its support too.
Immigration and liberalisation— the endgame for CCP
When you face a labour shortage, you open up to immigration and this is what many countries and regions have done throughout human history. But for the CCP, mass immigration would be an endgame.
Once you open up to immigration, you don’t just bring in people but you also bring in their lifestyle, their food and their culture. In the US, for example, you can find many Indian restaurants today due to the heavy immigration of Indians in the country. And more importantly, immigration also brings in foreign ideas.
So, if China looks at immigration from say, Vietnam, Indonesia, Malaysia or Mongolia, we are talking about people bringing in ideas like democracy, liberties and freedom. The Chinese society will have to liberalise to enable immigration for addressing local labour shortages. And once the Chinese society liberalises, it will be an endgame for the CCP.
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The CCP has thrived on big foreign companies, lack of liberties, cheap labour and gross human rights violations. But with a rapidly shrinking and ageing population, the CCP is set to lose all these advantages. The shrinking Chinese population is the beginning of the end for the CCP, and this is why Xi wants couples in the country to think of China and have more children— a plan very unlikely to succeed.
