The rest of the world has benefited extensively from China’s coming out party. Cheap products flooded the shelves of the developed world, and China bought the world’s raw materials when no one else wanted them. Unfortunately, every good time must come to an end.
Unfortunately these demographic headwinds are now in full gear now and they are hitting China at the worst possible time. The size of China’s working population is set to begin declining.
Here’s a more in-depth look at China’s population pyramid from the 2010 census. Note that those who are 15 years old are now 20, and you will see that there are not many young people to enter the workforce, as well as the fact that there is an overabundance of males in the country (a separate demographic issue).
As the easy fuel for growth runs out, companies have sought to increase productivity by other means. Debt has soared for non-financial corporations in the country.
