Monthly Archives: July 2024

A Historical Episode of Debt Repudiation.

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            Over the course of the 18th Century, the kingdom of France got into serious financial trouble.  Over-simplified, both sides of the balance sheet were out of order.  The government spent too much money on administration, lost wars, and a lavish royal court.  The government took in too little money because the aristocracy and the Church paid too little in the way of taxes in proportion to their vast share of the productive resources of the country. 

In 1788, King Louis XVI had to face the fact that France was broke and needed to call an Estates-General to raise revenue.  The government spawned by the Estates-General sought to deal with France’s financial problems by confiscating the lands of the Church and of aristocrats who had fled abroad, and issuing a paper currency (the “assignats”) backed by the revenue expected to come from the sale of those lands.  Printing paper “assignats” offered a simple solution to the revolutionary government’s budget problems.  This became all the more true when war with a host of other countries broke out.  Inflation mounted rapidly, while efforts to control prices by mandate failed. 

Inflation penalizes those who cannot adjust their incomes.  It is tolerable to those who can adjust their incomes in pace with the rising prices.  It rewards those who can over-adjust their incomes.  How?  Borrow money or buy on credit for future repayment.  Over time, you can repay the original debt with depreciated currency.  Generally, inflation hammers ordinary people while rewarding the enterprising—or the dishonest. 

In 1794, the Finance Minister reported that “The national Treasury was completely empty; not a single sou (penny) remained. The assignats were almost worthless; the little value which remained drained away each day with accelerated speed. One could not print enough money in one night to meet the most pressing needs of the next day…. The public revenues were nonexistent; citizens had lost the habit of paying taxes. […] All public credit was dead and all confidence lost. […] The depreciation of the assignats, the frightening speed of the fall, reduced the salary of all public employees and functionaries to a value which was purely nominal.”  Even when the government finally stopped printing paper currency—and publicly destroyed the printing presses, all the previously-issued paper currency remained in circulation. 

Furthermore, there remained the national debt in the form of bonds sold by the government to people with money to spare.  The process for raising money was normal.  The amount of money raised was not. 

This went on until 1797.  On 30 September 1797, the Finance Minister of the time, Dominique-Vincent Ramel acted to stop this process.  On the one hand, he imposed a series of new taxes on property and luxury goods.  The property taxes took the form of levy based on the number of fireplaces and chimneys, and doors and windows in a building.  To deal with the national debt, Ramel called in all the outstanding bonds, then replaced them with new bonds at one-third of the value of the old bonds.  That is, the government repudiated two-thirds of the national debt.  Those who had bought bonds out of prudence or patriotism lost two-thirds of their investment. 

This is a matter of purely historical interest.[1]            

[1] Alan Rappeport, “U.S. Debt Set to Top $56 Trillion,” NYT, 19 June 2024. 

Ukraine and Russia fighting for peace.

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            Vladimir Putin seems to have done some of his homework before attacking Ukraine.[1]  While the military plan of conquest failed badly, his diplomatic preparations have proved much more sound.  He played on the discontent among revisionist states with the American-led “rules based order.”  In particular, Putin formed an explicit partnership with China’s Xi Jinping before launching his attack.  Since then, China has remained formally “neutral on the side of Russia.”[2]  Western economic sanctions plastered on Russia have been blunted by China’s purchases of Russian oil and gas, and by China’s sales of consumer goods.  China has also provided Russia with “dual-use” (i.e civilian and military) technology. 

An authoritarian Russia is backed by other anti-Western dictatorships (China, Iran, North Korea); a democratic Ukraine is backed by the North Atlantic Treaty Organization (NATO).   The objective balance of forces favors Russia.  The uncertainty introduced by the 2024 American presidential election compounds Ukraine’s sense of insecurity.  What would the election of Donald Trump mean for American support for Ukraine?  What would the election of Kamala Harris mean for American support for Ukraine?  Neither one is Joe Biden; each would be free to pursue their own priorities in foreign policy. 

Russia’s conditions for even a cease-fire amount to a surrender by Ukraine and NATO.  Ukraine would have to agree to permanently halt its current drive for NATO membership; agree to become permanently neutral, and pull its troops out of areas of the Ukraine where they have been fighting the Russian.  In addition, international economic sanctions on Russia would have to be lifted. 

Now, beleaguered Ukraine is willing to negotiate an end to its war with Russia on “just terms.”  Ukraine’s conditions for a cease-fire amount to a surrender by Russia.  Chief among them is the demand for Russia has to pull its troops out of all Ukrainian territory and leave them under Ukrainian control.  Ukraine’s President, Volodymyr Zelensky launched an effort to gather other countries to pressure Moscow to make peace on Ukraine’s terms.  That effort has failed, and Zelensky has publicly blamed China.  Zelensky has argued that China urged other countries to not attend. 

            China does not seem disturbed by the criticism.  China uses a different terminology from the West, calling the conflict a “crisis” rather than a “war.”  It has called for a cease-fire.  In May 2024, China and Brazil issued a proposal for peace.  Xi Jinping has said that a real peace conference has to include Russia as an equal.  Xi did not attend the conference organized by Ukraine, which excluded Russia.  “China believes that all conflicts must be resolved by returning to the negotiating table,” said China’s foreign minister Wang Yi. 

            Some people believe that any further developments will have to wait on the American election in November 2024.  This is not true.  There is a lot of time left in the fighting season for Russia to act.  Why not present whoever wins the election with a new military situation that forces either Trump or Harris to make the same decision on Ukraine? 

[1] Isabel Coles and Austin Ramzy, “China Casts Itself as Peacemaker,” WSJ, 25 July 2024. 

[2] Similarly, the Soviet Union was “neutral on the side of Germany” from August 1939 to June 1941; the United States was “neutral on the side of Britain” from May 1940 to December 1941.  The neutrals supplied their partners with arms, food stuffs, and raw materials, while making life as difficult as possible for the enemy of their partner. 

Occupy the Other 98 Percent 2.

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            Original quote by Congresswoman Pramila Jayapal (D-Washington). 

In 2022, the US government deficit–not the national debt, which is vastly greater–was $1.2 trillion.

Seizing ALL the wealth of these three men would produce $454 billion. That would cover one-third of one year’s deficit.

Then, you could never go back to that well in following years because you would already have seized the wealth that generates their income.  That income allowed them to accumulate such wealth.

IF you get your wish and seize their wealth, THEN you have to choose what to do with it.

Sell it for revenue? Then other rich people will be the buyers of these goods at fire sale prices. You’ll just make other rich people richer.

OR the US government could operate these corporations to derive the income that now goes to the men who actually created those businesses. Maybe you could have the Post Office run Amazon and NASA run SpaceX?  Should turn a tidy profit from that. 

Final thing, the Constitution granted the government revenue from tariffs and excise taxes. The Constitution had to be amended to allow an INCOME tax.[1] For a WEALTH tax, the Constitution would again have to be amended.

“Occupy Democrats” doesn’t seem to care about any of these facts.  On “Occupy Democrats,” see: Occupy Democrats – Wikipedia 

[1] See: Sixteenth Amendment to the United States Constitution – Wikipedia  On the issues involved in a “wealth tax,” the following is helpful.  Is A Wealth Tax Constitutional? : Planet Money : NPR 

Occupy the Other 98 Percent 1.

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His birth-name is Bowman, but his mother divorced his father soon afterward.  So he did not “grow up” under that name.

His mother remarried and her new husband, named Hamel, adopted the boy and changed his name to Hamel.  Didn’t ask the kid what he wanted.  

“Jimmy” is a common form of “James.” 

He grew up in Middletown (not Middleton), Ohio, which is dominated by a steel mill that had to shed a lot of workers. IDK what kind of suburb you live in, but I bet there isn’t a rolling mill as the main employer.

Upon graduation from high school, he enlisted in the Marines. Assigned to be a military correspondent, he deployed to Iraq in 2005 and was assigned as a PIO for a Marine air unit. He has said that the Marines “taught me how to live as an adult.” If you read a bunch of memoirs-disguised-as-war-novels (like Herman Wouk, The Caine Mutiny; Nicholas Monsarrat, The Cruel Sea; Leon Uris, Battle Cry), you’ll see that this is a common recognition.  Also, Vance says that he never saw any real combat.  So, no stolen valor here. 

Went to Ohio State on the G.I. Bill.  Went to Yale law school on a near-full ride scholarship. So much for the “‘not poor at all” lie.

His mom’s maiden name is Vance. Yes, when he got married, he took her last name, rather than that of one of the men passing through her troubled life in one of the places that urban, hi-tech and high finance America forgot for so many years.   

What’s a “hillbilly”?  According to Merriam-Webster, it’s a “person from a backwoods area.”  Vance’s mother grew up in Jackson, Kentucky.  Population 1,852 in 1960.  After she moved to Ohio, J.D. Vance spent some summers in Jackson.  We have Saint Patrick’s Day for all who claim Irish ancestry, no matter how remote, but Vance’s claim to cracker roots is a “literary fiction”? 

This was created by a site with a long record of producing distorted material in support of the Democratic party. Fine; it’s a free country. Or so they say.

However, it isn’t hard to check the supposed “facts.”  Anymore than it is for Trump supporters to check the facts on the equivalent garbage churned out by equivalent sites on the right. If facts are what you want to know. 

The Middle Kingdom Commission on Higher Education.

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            It can be difficult to conduct normal academic research in contemporary China.  The country is a Communist dictatorship, even more so under Xi Jinping than under his immediate predecessors.  Information is tightly controlled.  The rising tensions with the West, and especially with the United States, make people both suspicious of and suspect from close contact with Westerners. 

            As a result, much of the most insightful work relies upon personal experience or interviews with a few people willing to talk in some depth about their own experiences.[1]  Such personal experience and observation can cast light upon larger institutions.  Thus, two recent books agree that China’s educational system remains as it was in the 1990s: “competitive, repetitive, [and] test-focused,” requiring “intense powers of focus…to succeed.”  The exams begin early in elementary school and continue through high school.  Then there are the exams for college admission.  All the exams open—or close—the paths to success in many areas.  Parents worry that their children will fall by the wayside.  Often, they pay for supplemental instruction, either in-person or on-line to buff up their children’s chances of success.  That makes for long hours of hard work for both parents (to earn the money for the courses) and the children (who grind through the lessons).[2]  Failure traditionally means a life of blue-collar industrial work.  Sewing pants and shirts in a sweat-shop for the American market, for example. 

            Is such a system “good” for Chinese society in general and for the students themselves in particular?  Well, it gives China a lot of highly qualified human capital in whatever areas the government values.  If it is engineers, scientists, and economists, then it serves the needs of a society in the course of economic development.  China’s economic performance over the last half century has been remarkable.  People who perform poorly on the exams provide some of the less-skilled labor to man the factories. 

            It is more of an open question about how well the system fills the needs of the students.  Part of the difficulty in assessment is that most American students don’t work as do elite Chinese students.  So it is natural to respond “Yikes!”  Then, American education isn’t very well attuned to the “needs of society” being more important than the desires of students.  That isn’t the same thing as students not being well attuned.  They generally want good jobs and are alert to signals from the market.  Hence, there are a lot of business majors and nurses in training.  The colleges and universities fall into line in the desperate struggle to stay afloat and avoid being yelled at by parents, donors, and Senators grabbing a sound-bite.  Yet the United States seems to fall behind at producing engineers and scientists, while over-producing lawyers. 

            Education is one area in which Communist Party control remains clear.  There is always the possibility that rigid institutions will generate resentment and resistance.  Keeping the lid on works.  Until the temperature inside rises enough to cause a boiling over. 

[1] See Maura Elizabeth Cunningham, “China’s Education Grind,” WSJ, 13-14 July 2024.  Cunningham reviews Peter Hessler, Other Rivers, and Yuan Yang, Private Revolutions. 

[2] Many recent immigrants from the Far East to the United States, mostly Chinese and Vietnamese, pursue the same strategy in their new country.  The success rate of such Asian-American students in gaining admission to the selective, exam-based elite high schools in New York City has spawned an ugly backlash.  Parent-of-Other-Color complain about the small numbers of Black and Hispanic students who win admission. 

The Rap on Kamala Harris.

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            Critics of Kamala Harris (and they’re not all Republicans) cite the following perceived weaknesses.[1] 

            Regardless of what the Democratic “pezzonovante” think about Harris, voters don’t like her.  When she ran for Attorney General of California, she beat her Republican opponent by less than a percentage point.  All other Democrats in state-wide races won by at least 10 points.  In the 2020 presidential primaries, she flashed briefly, then had to drop out before the first primary.  As Vice President, she hasn’t had an approval rating in the polls above 50 percent since September 2021.  That’s only nine months after she took office.  On 22 July 2024, her approval rating was reported to be 38.3 percent with a positive view of Harris and 51.4 percent with a negative view.  Although she quickly has closed the polling gap between herself and Donald Trump, it’s early days yet.  Moreover, she’s closed the gap between herself and a really obnoxious person.  We’re into “world’s tallest midget” territory. 

            She is believed to be intellectually lazy.  She flunked the California bar exam the first time she took it; 72 percent of first-time test-takers passed.  That smacks of a failure to prepare.  According to the Washington Post, “Staffers who worked for Harris before she was vice president said….that Harris would refuse to wade into her briefing materials…, then berate employees when she appeared unprepared.”  It seems that this pattern continued in the early years (at least) of her vice presidency, because her chief of staff quit over the same issue. 

            She is often inarticulate.  Fox has a field day with her “word salads.”  “We will assist Jamaica in COVID recovery by assisting in terms of the recovery efforts in Jamaica …”  With regard to Covid strategy in the US: “It’s time for us to do what we have been doing, and that time is every day.”  Statements like these give credence to the charge of intellectual laziness and unwillingness to prepare.  It’s like she just says the first thing that comes into her mouth. 

            She will not be able to escape association with the Biden presidency.  She can hardly repudiate the former president.  First of all, there is a deep conviction among Democrats that he has been a good and “consequential” president.  The celebration of his presidency runs hand-in-hand with moving him off the stage.  Second, she has never voiced the slightest reservation or dissent regarding the actions of the Biden administration. 

The trouble is that in July 2024, one poll reported that 42 percent of Americans saw themselves as financially worse-off since January 2021 and 17 percent saw themselves as better-off.  Similarly, the movement of so many illegal immigrants from the border states to Democratic cities in the Northeast and Midwest turned the issue into a loser for Democrats.  Biden’s order of June 2024 restricting illegal immigration responded to that change.  However, she was placed in charge of figuring out a policy three years ago; now someone else in the administration finally produces one and it looks a lot like Donald Trump’s policy. 

            The Harris campaign is going to need to address these issues.  Just “prosecuting the case against Donald Trump” may not be enough if the Democratic candidate seems not up to the job.  Biden tried that. 

[1] For a good summary of the criticism, see Bret Stephens, “Democrats Deserved a Contest, Not a Coronation,” NYT, 24 July 2024. 

Learning About Kamala Harris.

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            What is Kamala Harris’s approach to the economy?  She holds a BA in Economics from Howard and her father taught Economics at Stanford.  The basic issues must not be strange to her.  Still, figuring out her own positions requires reading the tea leaves. 

For four years, Harris has followed the Biden administration’s economic policy in “lockstep.”[1]  Any Vice President would do the same.  Former President Biden presided over a period of economic growth, rising employment, and rising real wages.  Harris has supported his calls for higher taxes on corporations and on individuals earning at least $400,000, while cutting them for lower income groups.  In particular, they have called for maintaining many of the 2017 Trump tax cuts as they effect lower incomes while raising taxes on upper incomes. 

Harris is lumbered with the inflation and high interest-rates of recent years.  Consumer prices have risen 19.5 percent since December 2020.  House prices and rents are currently very high.  Harris has blamed the price rises, in part, on corporate profiteering.[2]  

Harris likes tax “credits.”  Senator Harris proposed a sort of universal basic income for lower-income earners.  It would have paid $3,000 a month to individuals and $6,000 for married couples.[3]  It would have operated through a tax credit.  In 2021, the Democrats pushed through a temporary increase in the child tax credit and an earned income tax credit for childless workers.  Those measures soon expired, but Democrats (including Harris) have supported their revival.  Harris also proposed a Rent Relief Act.  It would have provided a tax credit to renters who earn $100,000 or less and who spend a minimum of 30 percent of their income on rent.  Harris opposed the 2017 tax cuts pushed through by the Trump administration; in 2020, while running for president, Harris called for the full repeal of those tax cuts.  In 2019, she said that she would not have voted for the North American Free Trade Agreement.  She did vote against the renegotiated version during the Trump administration. 

            Harris may have little interest in or grasp of national economic policy.  She reportedly made little contribution to either the economic legislation of the early administration nor to the urgent debates over a response to the painful inflation that the legislation helped to ignite.  To the extent that she did engage, it was with the “human interest” perspective on the issues.  “[H]ow certain policies affect workers and families at a personal level…”  Harris vigorously supported child tax credits, as well as other pro-family and child policies.  The latter could not garner enough support among Senate Democrats to be included in legislation.  Harris also pushed hard to expand access to capital provided by banks to small businesses and communities of color. 

            She has argued against medical debt impinging on credit ratings, setting this in parallel to the Biden administrations attempts to cancel student loan debts. 

Harris is much more of a micro-economy person than a macro-economy person.  If Harris becomes president, She’ll need a good Treasury Secretary.  They all do. 

[1] Jon Kamp, Richard Rubin, and Justin Lahart, “Harris’s Past Hints At Economic Policy,” WSJ, 25 July 2024, and Jim Tankersley, Jeanna Smialek, and Ana Swanson, “Harris’s Views on Economics Are Seen as Being Mostly in Line With Current Policy,” NYT, 25 July 2024.. 

[2] Economist NOT on the far-left blame high demand intersecting limited supply. 

[3] So like Social Security for people of working age?  It seems likely that the payments would increase with the passage of time. 

The Woes of China 2.

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            China scares people elsewhere, but not only for the reasons that Zi Jinping desires.[1]  In recent decades, infrastructure projects powered much of China’s economic growth.  Now there is a fear that China’s economy will not escape an avalanche of debt incurred to finance those projects.  As part of its effort to build infrastructure, the government centralized the financing of local development and infrastructure schemes.  Yet the central government wanted cities to take the lead in this effort.  Perhaps the theory was that local people know better than a remote bank what opportunities exist in their communities.  At the same time, the central government had traditionally kept a tight leash on borrowing by cities in the form of borrowing limits.  So, where would the money come from if the cities could not issue many more bonds? 

            The solution came through cities borrowing from state-owned Local Government Financing Vehicles (LGFVs).  The LGFVs may be state-owned, but they keep their own set of books.  These are separate from the central government’s books.  The LGFVs borrowed money from state-owned Chinese banks, then re-lent it to local governments all over the country.  The banks lending the money seem to have believed that the government would never let the cities or the LGVFs default because it would wreak havoc on the country’s financial system. 

The trouble is that those local governments did not always know what kinds of real opportunities existed, or they derived income from selling public lands to developers, or they didn’t care so long as they could keep their locals employed.[2]  In any case, the result appeared in massive over-building relative to real demand.  Since 2022, China’s real estate market has been slipping downward. 

            How much money is involved?  It’s hard to tell for sure.  Economists estimate that it is between $7 trillion and $11 trillion.  (For comparison’s sake, the debt of the Chinese national government is estimated to be $4-5 trillion.)  A big chunk of that debt—around $800 billion–is in the shadow of default.  

            There seems to be a fair amount of mutual back-scratching: many LGFVs guarantee the debts of other LGFVs even when both are heavily indebted; and some park their own assets with other LGFVs when their financial stability is being assessed.[3]  Now central government officials are showing up in localities carrying a lot of debt.  They are demanding to know “What in the Wide, Wide World of Sports is going on here?”[4]  There mere presence seems to be paralyzing projects already under way. 

            “Well, let them go bankrupt: serve them right and teach everybody a good lesson,” would say theorists of capitalism.  The thing is that another capitalist slogan holds that “Small debts are a problem for the borrower; big debts are a problem for the lender.”  If the local governments default, then either the government has to step in with a bail-out or the banks have to write-down the loans.  In the latter case, in particular, the result would be a tightening of credit throughout the economy.  That might be hard to contain. 

[1] Brian Spegele and Rebecca Feng, “Trillions in Hidden Debt Threaten China,” WSJ, 15 July 2024. 

[2] One local government official has been arrested and charged with spending the borrowed money on “political vanity projects.” 

[3] See: The Sting (1973) – Paul Newman card trick – YouTube 

[4] Blazing Saddles ( Kansas City Faggots ) (youtube.com) 

Jackson and Jacksonians.

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            Andrew Jackson (1767-1845) served as the seventh President of the United States (1829-1837).  He was, quite possibly, the worst president we’ve ever had.  His hatred of “elites” and desire to please the “common man” in all things led him to destroy the Second Bank of the United States.  This resulted in unregulated and irresponsible lending, massive bank failures leading to the “crisis of ’37,” and a prolonged depression.  He believed the president (well, himself), rather than the Supreme Court, to be the final arbiter of what laws were “constitutional.”  This belief, along with his own deep hostility to non-whites, led him to refuse to enforce the Supreme Court decision overturning the seizure of lands from Indian tribes by Southern states.  This, in turn, led to the “Trail of Tears.”  He appointed his lieutenant in legal matters, Roger B. Taney, to the Supreme Court when John Marshall croaked.  Taney later wrote the Dred Scott Decision.  With Thomas Jefferson, Jackson is regarded as the founder of the Democratic Party and the party annually held a “Jefferson-Jackson Day” fund raising gala.  In recent years, the title of the event has been molting because of the whole unfortunate slave-owners thing.  Not everyone sees Jackson in this light.[1] 

            Going on sixty years ago, the historian Marvin “Bud” Meyers analyzed what he called the “Jacksonian Persuasion.”[2]  Jacksonianism wasn’t an elaborate or formal ideology.  Rather, it was a set of often conflicting beliefs among ordinary people.  The Jacksonians idealized a vision of a society that was slipping away as laissez-faire capitalism advanced.  Change disrupted their lives, often for the worse over the short-run.  It bore a host of costs: not only economic, but also political, social and cultural.  It was full of ethical challenges or divergences from the way things had always been done.  At the same time, many of the Jacksonians embraced the new opportunities.  This created a psychological tension.  They blamed the urban elites—especially bankers and industrialists—for the changes.  The elites were characterized by the “[d]efective morals, habits, and character [that] are nurtured in the trades which seek wealth without labor, employing the stratagems of speculative maneuver, privilege grabbing, and monetary manipulation.”[3]  Eventually, other approaches overtook the Jacksonian Persuasion.  It died. 

            Not dead, just sleeping.  Decades of elite mismanagement have revived Jacksonianism.  Today’s “Jacksonian Persuasion” is anti-elitist, in both politics and the military.  It deeply distrusts big business, especially Big Tech.  They think international organizations are a joke, as is spreading democracy into places where it has not already developed naturally.  But they think that China is a real and great danger and they believe in a strong defense.  More than just having a strong military, the United States should use its power without hesitation when the country is actually threatened.  They like and admire strong leaders pursuing the national interest, even when they don’t fully agree with the policy.  (JMO, but they also like sticking their thumb in the eye of the “elites” just to watch the reaction.)   

            Today, Donald Trump is the leader of the “Jacksonian Persuasion.”[4] 

[1] See Robert V. Remini’s three-volume biography of Jackson (1977-1984), if you’ve got the time.  It is highly esteemed and not just a white-wash. 

[2] Marvin Meyers, The Jacksonian Persuasion: Politics and Belief (1957). 

[3] Meyers, Jacksonian Persuasion, p. 22.

[4] Walter Russell Mead, “America’s Jacksonian Turn,” WSJ, 15 July 2024. 

China and Demography.

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            Beginning in the 1960s, China’s population began to rise sharply.  By the 1970s, China found itself caught in a demographic “scissors”: population was rising faster than the economy was growing.  A growing population collided with a relatively stagnant economy.  Eventually, living standards would be forced down.  Moreover, an extended period of child-care for multiple children restricted China’s ability to mobilize women into the paid-labor force.  In 1980 Deng Xiaoping announced the “One-Child Policy” as part of the solution to this problem.[1]     

            The policy shifted many women into the paid-labor force at a time when China sought to prioritize economic growth.  The share of the population of working age people grew substantially in comparison to the share of the population of non-working age people.  Basically, that means children and retirees.  More labor became available for more years.  Huge numbers of Chinese between the ages of 20 and 64 flooded into the work that became available thanks to China’s opening to the West.  Double-digit economic growth rates followed.  That is, it worked! 

            There seems not to be available a source that tells us what the government decision-makers anticipated would happen over the long-term.  Worrying about what might happen many years down-range from some action taken today can paralyze action. 

            Today is the down-range of the many-days-ago.  What did happen?  The One-Child Policy shifted the age composition of the population.  Now, China’s population has a shrinking number of working-age people.  Women make up half of the working age population.  As a result, China also has a shrinking number of child-bearing age women.  China’s total population will fall.  A United Nations report projects that China’s population will shrink from 1.42 billion in 2024 to 639 million in 2100.[2]  Logically, there will be far fewer workers, anywhere from half as many to 60 percent fewer.  Thus, demographers anticipate that the most serious effects of this shift will not be felt for another 20 to 30 years. 

            Nor will they be felt in equal measure by other important countries.  For example, in terms of total population, in 2024 it is estimated that there are 1.42 billion Chinese and 344 million Americans; by 2100 there will be 639 million Chinese and 321 million Americans.  That is, China will go from having four times as many people as the United States to having twice as many.  The U.N. estimates that 31 percent of Chinese will be aged 65 or older by 2050; and 46 percent by 2100.  In contrast, the share of over-65s in the American population will by only 23 percent in 2050 and 28 percent in 2100.  That means that in 2100 China could have 345 million people under the age of 65, while the United States could have 248 million. 

            Zi Jinping appears to harbor grand ambitions for China.  China looks like it will have fewer workers, fewer consumers, fewer scientists, fewer engineers, and fewer soldiers.  The human basis of those great ambitions will slowly erode. 

            Will this foster a sense of desperation among Chinese leaders, either Zi in the immediate future or his successors in the later 21st Century?  There are ways to adapt to changing conditions.  You just have to be willing to do it. 

[1] Liyan Qi and Ming Li, “China Pays Price for Its One-Child Policy,” WSJ, 12 July 2024. 

[2] However, in 2022, the same U.N. office predicted China’s population would fall to 766.7 million people by 2100.  That’s a 128 million-person difference.  Another projection says that China will have 525 million people by 2100.  It’s not that the demographers are incompetent.  It’s just that getting reliable information out of China can be tricky.