How China blew up its own future

This is a video from Doian, China's version of Tik Tok. It's not real. It's a skit, a spoof. That guy on the left is supposed to be an official from the State Birth Encouragement Office. And he's yelling at this guy to tell him, "Hey, you better [music] have kids." The joke is that this is what it feels like to be in China nowadays. >> China has been getting very intense about pushing its citizens to have babies. They're offering subsidies to new parents, cash handouts to people who marry young, free child birth services, free preschool, even bonus points on school entrance exams for second and thirdborn kids. They're even taxing condoms and birth control pills so Chinese couples will have more unprotected sex. This all started two years ago when Xi Jinping started talking about a new culture of marriage and childirth. This whole speech was she telling government officials it was now a matter of national urgency to increase child birth rates. [music] Ever since China's state media has been bombarding people with messages about their patriotic duty to procreate. Officials are even starting to call up young women one by one to say, "Hey, shouldn't you be getting pregnant right now?" So, what happened to get Xi Jinping so spooked? Why is the machinery of the biggest, most centralized state in human history all suddenly shifting into gear for this for babies? I think I have a pretty good idea. [music] It has to do with the fact that China's population, after centuries of going up, is starting to decline. and it went down for the first time in 2022 and it has gone down every year since. Projected to keep dropping until China is half the size it is today. You might look at this and think, okay, so what? China would [music] still be huge, bigger than almost every other country. And yeah, it will be. But there's something hiding within this data. [music] Something much more serious. Something that will undermine the foundations of China as we know it, and endanger everything China has built in its rise to global power. It's [music] right here. I know you don't know what this chart means yet. That's okay. you're not supposed to. It's rooted in some very particular, very dramatic moments in China's recent history that make it the country it is today. This is a big economic thing. So, we're going to build our way up to what it is and why it's got sheed going to incredible lengths to reverse it. To the point that Chinese people are joking about government thugs individually bullying them into having babies. Because if China can't fix this, and so far it has not figured out how, no one has actually, the Chinese century will end just as it's getting started. To understand this problem looming over China, we've got to look at what it and the world will look like at the end of this century if they fail. And at this one very alarming chart that shows where things are headed. It's a story that all traces back to something called the one child policy. Something you may have heard of. But let's start with a particular problem that basically every country encounters sooner or later. As societies get richer, people have fewer and fewer babies. This is from the open- source website, Our World and Data. They're great, and we're going to show you a bunch of their charts. And it shows that as of 1950, the average woman in these countries gave birth about three times in her life. [music] But nowadays, it's closer to one and a half births. But that is actually a huge drop. And there's a reason why this is such a big deal. Anything below this magic number called the replacement rate and your population starts to shrink. You see [music] birth rates going down like this pretty much anytime a country gets richer. Western, non-western, good social safety net, bad social safety net always happens. [music] Here's an R world and data thing that shows this. Each dot is a country. Moving right means it's getting richer. Down means lower birth rate. There they go. Down and right. Down and right. And if you're wondering, okay, but why? The answer has to do with a bunch of things. A big one is people's values changing as they have more opportunities and options that come with greater wealth and education. But it's more than that, too. We don't need to get into all of that right now, but if people want, we could. So, let us know in the comments. But for now, just know that when a country gets richer, people have fewer kids. Okay, good. Anyway, look at that chart again. Let's just highlight a few of the rich countries. [music] The US, Japan, Russia, France, all clustered together, right? But here's [music] China, and it's kind of an outlier. It's like it ended up with the birth rate of a much richer country without becoming rich. Let's actually highlight China's whole trajectory here. You see, [music] China's birth rate dropped really early. This is super important. Most countries by the time their birth rates go down, they look like this or this. They've got rich, highly developed economies that help them absorb the problems that come with [music] birth rates going down. But China hasn't gotten to that point. Pull that chart up one last time. Something happened here that threw China way off course. This is why China's birth rate is dropping 50 years before it should. So what happened? You probably know what's coming here. That this is something China actually did deliberately. It was planned. And that plan had a name, the one child policy. >> One child. >> One child [music] policy. >> One child. >> Go back to that chart of birth rates. [music] Let's add China in here. really really high birth rates here in the 1950s. Six or seven kids per family. Then China had a huge catastrophic famine here [music] due to a policy called the Great Leap Forward. >> He who does not work shall not eat. [music] >> A government policy gone disastrously wrong. Ma's so-called great leap forward, [music] >> which caused an unprecedented famine. The terrible death toll was around [music] 45 million. And as happens after a famine or war, once it ended, there was a baby boom. A crazy huge one actually, like seven plus kids per family. Huge. China's leaders saw this and they panicked. They thought China's birth rate was [music] going to stay like that forever, like this. So now we got to meet this guy. This guy was in charge of population policy at the time for China. [music] and he predicted the population would grow to 4 1/2 billion [music] and exhaust the country's food resources. This is what he thought would happen. This is his prediction. But this is a crazy prediction. [music] That's not how this works. And the thing to understand is that China at this point was run by engineer. Like the guy who made that prediction, China's population guy was a missile scientist. Social scientists, the sorts of experts who could have said, "Hey, don't worry guys, population growth slows on its own. it's going to be fine have been mostly jailed or exiled in political purges. So all of these engineers in charge bought that guy's official recommendation to save the country from this completely wrong prediction of rampant overpopulation by doing something very drastic. Banning any family in China from having more than one child. That sounds impossible. How do you police the wombs of hundreds of millions of mothers? How do you prevent anyone anywhere in China from having a second child? So, they put this guy in charge of it, a former army general, and he sent what he called shock brigades of doctors and government thugs doortodoor, village to village to terminate any pregnancy if the mother had already had her oneotted child. So, heads up, the next 90 seconds mentioned stories of pretty upsetting violence related to pregnancy. I just wanted to let you know, skip ahead if you want. So, in just their first year, those shock brigades coerced 14 million women into abortions [music] and sterilized another 16 million. One reporter described seeing them abduct pregnant women on mass for forced abortions. This is from a 2019 documentary called One Child Nation. You can watch it on Prime. >> [music] >> One thing it shows is the people who implemented all this really believed still believe it was necessary. [music] Officials in one city were reported to have tied up women in hog cages and stacked them on truck beds to be sent to forced abortion centers, which in that city alone performed 19,000 abortions over a 50-day period. In all, China conducted more than 300 million abortions. [music] By 1999, it had also sterilized one in three childbearing age married women. One in three. [music] I'm telling you all this to make a point. Western depictions of China tend to be split between two extremes. Either it's a hyper competent technocratic state capable of pulling off huge projects no other country could or it's a dictatorship of unaccountable bureaucrats who do things like forcibly abort hundreds of millions of babies based on a mathematical error. I think what this episode shows is that China is both of those things. And the big question is which will prevail now as the country tries to diffuse the demographic [music] time bomb that it set for itself and that is about to go off. A big challenge reading the news today isn't just finding a source you trust, but seeing how the same story looks from different angles. And a great resource to navigate our media landscape is Ground News, the sponsor [music] of this video. They are an app and website that aggregates news from sources worldwide so I can compare coverage, reliability, and who owns them. Let's say you want to dig into the Pentagon's dispute with the AI company Anthropic. Ground News shows over 100 sources are covering this and their classification of each outlet's positioning along with factuality and who [music] owns it. Fox News, coded as rightwing, frames it as the Pentagon giving entropic an ultimatum to remove restrictions. But in Gadget, classified as lean left, describes the Pentagon as challenging the company's safety guard rails. That's a real distinction. It's why ground news is a great way to understand how the media is shaping stories. Zapier.com calls it one of the best news apps on the market. It's completely subscriberfunded. Get the unlimited access Vantage plan for 40% off by going to ground.news/maxfisher [music] or scan the QR code on your screen. Now back to China. [music] So look at this chart again. By 2015 when China ended the one child policy, yeah, birth rates have been really low for a long time. But remember that below this line, a country's population will shrink. China pushed itself so far past this line that it is now triggering something that the architects of this policy never anticipated. [music] Something very very dangerous. Okay, remember this chart? This is the time bomb. To explain it, I want you to picture a family. Think of this family as representing all of China right now. Today, China's population looks like this. China's got on average four and a half working age adults. for every one child and every one elderly person. Actually, let's see the numbers. China's got 980 million adults, 236 million children, and 204 million elderly people. That means above retirement age. This is a really healthy balance. It means that there are 980 million working age people supporting less than half that many kids and retirees. Population scientists call that the dependency ratio. This number is really important. When it's low like this and 45 is low, it means there's lots of extra workers, extra productivity in the economy, just like if a family had four working adults, and only two people it had to support. That extra money can go towards buying goods and services to stimulate the economy. It funds taxes that go to building up cities, pays for roads, schools, or missiles or aircraft carriers. all of the things that make China a rising power in the world, but only so long as that ratio of dependent to working age adults stays healthy and low. But that allimportant number is changing for China. [music] So now we're back at this, the big chart scaring Xinping and we're finally ready to explain what it says. What we are looking at here is the dependency ratio for China over time. It used to be really high, almost double what it is today back here. Remember, this was that huge baby boom that inspired the one child policy in the first place, which is just to say, this number hitting 80 so scared China's leaders, they thought it would literally destroy the country. Now, let's see how China compares to other countries. China's number today is lower than most peer countries. Remember, that's good for them. Take a look at France for comparison. Like in a lot of Western countries, French people are having fewer kids, and a growing share of its adults are aging into retirement, which together have pushed up France's number to 63. Here's what that looks like. Okay, got to French him up a little bit. Yeah, that's better. France looks like this. One retiree, a little less than one child for every three working adults. And compare that to China, which remember has more working age adults. This might not seem like a big difference, but it is. The French media is full of stories warning that all those seniors are draining the country's resources, pushing up poverty rates, ballooning healthcare spending. It's become like one of the biggest issues facing France. Because remember, a healthy demographic balance creates all this excess productivity that fuels the economy. But when you have too many dependents and not enough working adults, that productivity gets diverted to caring for the people who were too old to work. So that's France with the magic number at 63. Let's quickly look at Japan where it's up to 70 now. [music] And you've probably heard this described as a full-blown crisis for Japan, and it is. Here's what that looks like. Just two adults for every retiree. This is the point at which so much of the country's productivity goes toward care for the elderly that you start to hear phrases like national decline, population drop, shrinking cities. We're here to talk about China, obviously, but all of this is just to level set on how to read this magic number. 45 China today is good. 55 America's right now is fine. 60 to 65 in France is a national crisis. 70 in Japan is national decline. And 80, which China hit in the 1970s, is such an emergency it triggered the largest population control measure in human history with all of the violence that entailed. But China's number is about to go from good to catastrophic. To show you what I mean, imagine that I'm the average 30-year-old in China. And to make that easier to picture, we're going to play these clips from a popular Chinese soap opera called The Rational Life while I talk. Okay. [music] So, as the average Chinese 30-year-old, I have a nice job in a growing city. My parents were born in the baby boom of the 60s and 70s, so they have a ton of siblings to help take care of grandma. I was born in the one child era, so I'm an only child. Well, my friends are only children. My partner is an only child. But that means that one day when my parents retire and my partner's parents retire, we will have four elderly parents to take care of. And I'm worried all of our money is going to go towards their healthcare. We're allowed to have as many kids as we want now, but statistically we'll probably only have one or just as likely none at all. So when we get older, who's going to take care of us? If you like that there are 35 episodes on Netflix, all subtitled. It's not bad. Anyway, around half a billion people in China meet that description. And we do actually know what's going to happen when they and their parents get older. This is the most recent report from the United Nations World Population Study. It uses all the sophisticated data and math to project out each country's future. And the numbers for China are pretty alarming. Here's what it boils down to. This is 2050 in China when the young adults from that soap opera we just saw are going to reach middle age. This is exactly the same balance as today's [music] Japan. So, China is going to become Japan. Let's see that magic dependency number for China and its peers in 2050 according to that UN data. Wow, everybody's [music] number is going up. China's going to pass America and Russia to reach about 70. Yeah, same as Japan today. Meanwhile, Japan's will get up to Yikes 94. I'm worried about Japan, guys. But let's stay on China because this UN data says things get real worrying after [music] 2050. Keep your eye on China here. That number keeps going up and up [music] until, oh, okay, 99. Worse than Japan, worse than any other major country. This looks even crazier when you see it like this. By 2075, there will be barely one working adult in China for every retired person they have to support. This is all echoes from the one child policy coming right before China got wealthy in the way that always pushes down birth rates. So now it's a nation of only children having only children. And each generation, you get more and more people aging into this bucket of elderly retirees and fewer and fewer working adults to support them. What makes this population death spiral dangerous is that it is happening so so quickly. We can actually project these numbers all the way to the year 2100. Yeah, that magic number it is going to 128. >> [music] >> So remember, 60 is a crisis, 70 is national decline, and 80 is a threat to national survival. But China is going to reach near 130. Let me show you what that looks like. Here is rock bottom. 60 years from today, more elderly people than adults, tens of millions more, and very, very few children before eventually settling into about 50/50 adults and elderly retirees. [music] So what does all this mean? Well, it tells us that China will look at the end of the century like the upside down version of the China we know today. Remember, this is supposed to be the Chinese century. And right now, it feels like it is. [music] military arsenal at a historic pace. China's space program is in overdrive >> for China's China. >> China's turn the nation into the factory of the world. >> China is expanding militarily. It's projecting power in every part of the world. It's a huge source of scientific breakthroughs, commercial and technological innovations. But all of this is built in a huge huge national workforce relatively unbburdened by dependence. And in not too long that formula is going to flip upside down. Cities will empty out as the population halves. Retirees will outnumber adults. And all those people will need healthare. They need social support which is going to have to come from that now much smaller pool of workers which means those families will have less money to spend on themselves to invest in education in starting a new business or inventions or art or technology and is going to leave a lot less money to pay for those big national projects. So, what does this China look like? I'm not going to claim to know for sure. It's just too hard to predict the future. But a few lessons from other declines. For one, does all of this turmoil and contraction cause political stability? I I don't know that necessarily. I mean, for that, you need young people. I mean, that's who protests. That's who goes into the streets to demand change. But young people are about to be pretty scarce in China, right? Something I would be more worried about is China's role abroad because declining powers, especially dictatorships like China's, tend to get aggressive as they decline. [music] Look at Russia. Its population started shrinking. Its power in the world receded. And ever since it's been lashing out to try to forestall the rise of pro-western democracy, it sees as a threat. I'm not saying that's the only reason Russia turned aggressive, but I am saying that there is a long trend in history going all the way back to the ancient Greeks. That great powers in decline become more paranoid, more reckless, and likelier to start wars. Here's China's population at the end of the century. Smaller, but still pretty big. But let's add in two of China's neighbors. Doesn't look so big anymore, does it? Looks like a power on the way down. But I I don't want to fear monger here. It is totally possible for China to decline peacefully. Like look at Britain or France. A century ago they ran the world. Now they're middle powers. No offense to Britain and France, but life is still good there. They have healthy economies. They make great art. They influence world defense. They're not filled states. >> Where is French? >> Really? >> And that could very well be China's future, too. But China does not see itself as ready for a nice chill national decline. It is still a long way from becoming rich or politically stable in the way that countries like Britain and France are. which is why its leadership is so desperate to forestall this demographic destiny. I mean, think back to the one child episode that showed with enough state power and willingness to do some really extreme things, you can coers people out of having a baby, but you can't coersse them into it. They have to do that voluntarily. That's one of the main things about having a baby. Lots of countries are trying to do just that, but not one has pulled it off. no matter how many child care subsidies or housing vouchers or cash handouts they expend. South Korea spent $200 billion dollars on this sort of stuff and it did not make a dent. [music] Experts disagree about why that is, but the point is no one has found a way to reverse the law of nature that as societies get richer as China's is, [music] their birth rates go down. Look, we as a species are just in the early stages of this problem. So, someone might well find a way to mitigate the burdens of an aging and shrinking population. Maybe technology. In Japan, one reason you see vending machines everywhere is to compensate for the shortage in retail workers from the population aging. And maybe we'll get better and better at this kind of thing through who knows, automation or something else that can help to absorb the loss in workers as populations age. But we do also have a workaround, [music] a proven workaround to this entire problem. And I'll give you a hint. Let's look at that magic number chart, the dependency ratio. There's one country that looks pretty good here, even well into the future, the United States. And why is that? [music] Well, it's because the United States is a country that lots of people want to move to in a way that is not true of other countries. [music] And this gives it a much healthier demographic balance. The math of this is simple. Immigrants tend to be working age. That's when they are able to migrate. And the US has a lot compared to other countries. about 15% of its population. So more immigration means more adults paying into taxes and social services per each child or retired person. That's the big secret. That's it. France has a lot of immigrants, too, which is part of why it's aging less rapidly than other European countries. Look at Japan. Barely any immigrants, faster demographic decline. And China, China has basically zero immigration,.1% going back years. China's immigration is actually technically negative. More working age adults move out of China than move into it to the point that something like 30 million factory jobs are already sitting unfilled. Lots of people would love to move to China for those jobs, but China will not let them. That's partly because China's leaders believe maintaining their rule requires strict social control, cradle to the grave, and letting an outsiders would undermine [music] that. And partly it's just the local flavor of the same nationalism and drive for racial and cultural purity we see rising [music] everywhere. I'm not saying that immigration is the only possible solution for China, just that the problem is solvable, but that that will probably come with some big trade-offs. China is getting to a point where is going to have to make a [music] choice between maintaining things as it is now of single party rule autocracy and a rigid race-based nationalism but at the cost of a demographic decline so severe that it is a near mathematical certainty that the second half [music] of the Chinese century would take it from a huge rising power to the largest nursing home in human history preserving the Chinese system at the expense of the Chinese nation and its future or it can choose to slow and maybe even prevent that decline [music] by allowing the kind of change, whether through immigration or something else, that the party has seen as a threat, to bend the demographic curve so that China can have a population balance that lets it continue to grow and flourish without being demographically weighed [music] down, that would keep the nation strong and healthy at the cost of compromising the political and social system that the country's leadership see essential to that rise, as the thing that makes the Chinese century what it is. I'm not saying those are the only two possible [music] outcomes. You know, maybe someone will figure out how to solve for these huge demographic and economic [music] forces that no one has been able to figure out. But if they don't, yeah, it's just this. The system or the nation. That's the choice. [music] [music] >> [music]