The Sun Has Yet to Set on China

[Population Aging to 2030, Day 2, Essay 2 of 2]

Recent news of China’s economic slowdown has many American defense analysts predicting the end of the Chinese challenge to US dominance in world affairs. These predictions are based, in part, on China’s rapid population aging and signs of internal political fissures, both of which call into question China’s ability to continue to rise.

Such celebrations are premature. For many reasons, China’s economic power could match or even surpass US power in 20 years. Domestic political and demographic trends in China suggest continued growth, while domestic political and demographic trends in the US are concerning.

Seriously considering this contrarian view of demographic trends in China and the US is important because, as many political scientists have shown, the possibility of war becomes more probable when a rising power sees the decline of the dominant power and acts to surpass it. If Chinese leaders see the following picture of demographic and political trends, they will perceive that the US is in decline while their own power is rapidly rising. The outcome could result in a more aggressive Chinese posture.

The Dragon Still Has Fire

Just as it is possible to see the picture of a declining China that many defense analysts have clung to, we can also easily amass evidence to support the argument that China’s trajectory is positive. Long-term demographic trends in China suggest significant opportunities for growing the country’s economy, even if at a slower pace than the last decade.

First, despite the rapid pace of China’s population aging, the leadership has made few entitlement promises to the elderly and health coverage is sparse, meaning that the direct costs of aging are low.

Second, there will be fewer youth entering the labor market each year as the population ages. Even if China’s economic slowdown is inevitable and the supply of jobs is lower, the demand for them will be lower as well.

Third, the concern over so-called “excess males” in the Chinese population may be overblown. Differential growth in the male population could help China increase its national security through mobilizing surplus males for the state’s economic benefit. China has already recruited young men into large-scale public works projects both in its urban centers and its more remote regions. China has also been sending young men abroad to harvest natural resources on other continents for China’s benefit.

Finally, the Chinese political system allows leaders to focus on long-term planning, unlike the US system, which encourages policies that are politically expedient and take into account the never-ending election cycle.

Signs of US Decline

There are serious signs that the United States is actually the country in decline. Health care costs are sky high in the US, when compared with its peers, and particularly when compared with China. The role of interest groups in US policy making means that narrow interests—such as drug companies or organizations focused on protecting entitlements for seniors—have undue political influence. The US political system is sclerotic and polarized, and the country suffers from high national and personal debt.

Demographically, total life expectancy in urban China is only one year less than in the United States and healthy life expectancy (HALE)—the number of years a newborn can expect to live in “full health” (an adjustment of the life expectancy estimate)—is declining in the US. It is possible that Chinese could soon work longer than Americans.

Additionally, while it is true that replacement-level fertility in the US and continued immigration would prevent the country from aging as rapidly as Europe and Japan—and perhaps even China—the generational gap between old and young Americans bodes poorly for the future of US supremacy. Specifically, young Americans today face a host of serious challenges that will affect their long term economic prospects and, when aggregated, mean that the US in 2030 may be worse off than today.

First, the US has the highest rate of child poverty in the developed world.

Second, trends in education, particularly among minorities, are particularly worrisome considering that minorities will make up an increasing portion of the adult population over the next 20 years. Minorities accounted for 92 percent of the nation’s population growth in the decade that ended in 2010, but blacks and Latinos lag far behind whites in earning a college degree. For those that do manage to get an education, student debt is astronomical, while many recent graduates struggle to find employment. How will this generation take care of retired baby boomers when their own needs are so great?

Third, home wealth has been an important safety net for elderly Americans for generations. The current generation of young Americans differs from previous generations because many can’t afford their own homes. Their needs in old age will be greater than today’s elderly and their demands on state higher. As a result, it is entirely possible that today’s youth will be the first generation in a long time that will not be better off than their parents.

Bucking the Trends

Despite the preceding evidence, there is still reason to give credence to discussions about China’s demise and continued US supremacy. Chinese leaders are right to be worried about the divide in living standards between rural and urban inhabitants. There is also much uncertainty as to what today’s Chinese youth will want as adults. How might they be shaped by their greater educational opportunities, and in what ways will this translate to political demands?  Will they push China to adopt a more democratic political system where power is less centralized and interest groups gain influence?

The United States of America still has several aces as well. American creativity and ingenuity have historically played an important role in economic growth. The sheer size of the US economy and the country’s ability to recover from crises may also be important.

There are ample opportunities for the US to cement its place as the world’s most powerful state by turning more attention to domestic matters, specifically strengthening education—particularly for minorities—and balancing entitlement commitments with other national priorities, like defense. But rest assured, the Chinese will be working on their own domestic issues, as well.

Jennifer Dabbs Sciubba is Assistant Professor in the Department of International Relations at Rhodes College, Memphis, Tennessee, USA. 

By Daniel Krcmaric

As the United States winds down its involvement in Iraq and Afghanistan and implements a “strategic pivot” from the Middle East to Asia, it seems appropriate to take stock of America’s future role in the Middle East.

 

The logic underlying the strategic pivot is that the dominant foreign policy issues of the coming decades—in particular, the rise of China’s economic and military power—will occur in Asia.  Since the pivot is occurring in an era of defense spending cuts, the U.S. will need to reduce significantly its commitments in the Middle East if it wants to make a true strategic pivot toward Asia.  While the pivot makes sense given the current and anticipated future power projection capabilities of China (and several other states in the Asia-Pacific region), it is not clear that pivoting away from the Middle East is feasible.

 

Why not? Oil. Simply put, the health of the American economy depends in part on the stable flow of affordable oil, thus making the Middle East a strategically important region.  While much of the rhetoric surrounding the pivot correctly notes that vital U.S. interests were not at stake in Iraq or Afghanistan, it obscures the fact that America’s commitment to maintaining a strong military presence in the Middle East predates these recent conflicts. Indeed, the U.S. has long sought to prevent the rise of a regional power and/or the intervention of a hostile foreign power that could potentially control the region’s oil wealth.  This is especially true in the years since the 1973 OPEC oil embargo, during which oil-rich states in the Middle East have consumed an extensive share of America’s time and resources.  Looking ahead, the prospect of a nuclear-armed Iran that could potentially threaten to cut off the flow of oil through the Strait of Hormuz suggests continued U.S. involvement in the region is likely.  Moreover, China currently depends—and will rely even more heavily in the future—on oil imports from the Middle East. As a result, it is reasonable to expect that at least part of the coming geopolitical competition between the U.S. and China will occur in the Middle East.

 

Given this, is the U.S. doomed to remain bogged down in the Middle East? Not necessarily.  Revolutionary technological advances in hydraulic fracturing (“fracking”) and massive new discoveries of natural gas—along with improved fuel economy standards—mean America’s energy dependence on the Middle East will decrease in the following years. The magnitude of that decrease, however, is open to debate.  Talk of American energy independence is popular within some circles, although more prudent analysts warn against over-optimism.  While we can’t predict the future of developments in American energy, one thing seems clear:  a true strategic pivot from the Middle East to Asia is possible only to the extent that the United States reduces its dependence on Middle Eastern oil.

 

Daniel Krcmaric is a National Science Foundation Graduate Fellow and a Ph.D. candidate in Political Science at Duke University.