China's Demographic Limits to Economic Growth
Abstract
China's demographic transition will create great difficulty in continuing the scale of economic development seen over the last 30 years. This difficulty will be experienced through the costs of the demographic detour, which began during the Great Leap Forward and was then magnified through the birth limiting campaigns up to and including the One-Child Policy. While the skewing of the dependency ratio over the last 30 years resulted in significant contributions to China's economic development, this has reached a limit such that the unborn laborers will present a strain on development. This strain will be present in the form of a shrinking and rapidly aging labor pool, resulting in a decrease in innovation and productivity as well as an overhaul to thousands of years of tradition of doing business through familial ties. This will culminate in the testing of an already failing pension system as China experiences the transition from the demographic stage of a slowly growing population to post-transition. My thesis will approach the topic of the relationship between China's demographic story and its economic development as a qualitative analysis spanning from 1949 until 2000, broken into three temporal case studies. The case studies will be China during the Great Leap Forward, China immediately after the One-Child Policy was instituted, and China in 2000. My hypothesis is that China's demographic transition -- consisting of its population's age structure, labor percentages, dependency ratios, and fertility rates -- has positively affected its economic development so far, but some of the factors that contributed to China's success will present long-term costs in the next 30 to 50 years. When evaluated individually, each factor bears only a fraction of responsibility, but when taken all together and compounded over a span of 60 years, I expect to find that China will experience a limitation on its labor pool, and hence its economic growth, within this century.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jun 01, 2012
- Accession Number
- ADA563449
Entities
People
- David M. Truesdell
Organizations
- Naval Postgraduate School