Despite China repealing the Mao-era ban on families having one child years ago, China’s population continues to shrink – a significant change that will soon leave India as the world’s most populous country . The change will have a massive impact not only on the domestic Chinese economy, but globally. This is the reason why global economists and others are worried about this development.
The shrinking workforce can affect the global economy. For years, China’s massive working-age population powered the global economic engine, supplying factory workers whose cheap labor produced goods exported around the world. In the long run, a shortage of factory workers in China – driven by a better-educated workforce and a shrinking population of young people – could raise costs for consumers outside China, potentially fueling inflation in countries such as the United States Which depends a lot. Imported Chinese products. Faced with rising labor costs in China, many companies have begun relocating their manufacturing operations to lower paying countries such as Vietnam and Mexico.
The shrinking population could also mean a drop in spending by Chinese consumers, threatening global brands that rely on sales of products to China. Apple to smartphone Nike sneakers. The data is bad news for China’s vital housing market. China has also been unwilling to loosen immigration rules to boost the population, and has historically issued relatively few green cards to replenish its shrinking workforce. To address labor shortage, China is outsourcing less skilled production to other countries Asiaand is adding more automation to its factories, expecting to rely more heavily on artificial intelligence and technology sectors for future growth.
The shrinking workforce can affect the global economy. For years, China’s massive working-age population powered the global economic engine, supplying factory workers whose cheap labor produced goods exported around the world. In the long run, a shortage of factory workers in China – driven by a better-educated workforce and a shrinking population of young people – could raise costs for consumers outside China, potentially fueling inflation in countries such as the United States Which depends a lot. Imported Chinese products. Faced with rising labor costs in China, many companies have begun relocating their manufacturing operations to lower paying countries such as Vietnam and Mexico.
The shrinking population could also mean a drop in spending by Chinese consumers, threatening global brands that rely on sales of products to China. Apple to smartphone Nike sneakers. The data is bad news for China’s vital housing market. China has also been unwilling to loosen immigration rules to boost the population, and has historically issued relatively few green cards to replenish its shrinking workforce. To address labor shortage, China is outsourcing less skilled production to other countries Asiaand is adding more automation to its factories, expecting to rely more heavily on artificial intelligence and technology sectors for future growth.