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Chinese Deflation What Does It Mean

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Chinese Communist Party and China in its current form may very well be truly the doom due to a series of economic, demographic and geopolitical issues facing China all at once within this decade.

This may place the system of government under too much pressure, which could lead to internal disorder.

When writing about China, this could be anything from a cultural revolution, an invasion of Taiwan or the disintegration of China into a warring state repeatedly in the 4,000 to 3,500 years of Chinese history.

The history of China began with the Xia dynasty was the first of many ancient Chinese ruling houses and to present-day communist rule China.

Chinese Deflation What Does It Mean
Photo by Richard Tao on Unsplash

Demographic Issues and Deflation

The Chinese labour market has declined since the late 2000s and is terminal after 2016.

The reason for the decline in the birth rate started with China’s one-child policy, which was created and implemented in 1980 and removed in 2016.China then enacted a new policy called China’s two-child policy, announced in October 2015, was enacted to reverse the nation’s stagnant population growth, ageing population, and shrinking workforce.

The policy targeted some 90 million women of reproductive age who already had a child and now would be allowed to have a second child.

The Communist Party introduced the three-child policy in 2021, failing to increase birth rates. This led to the Chinese government finally removing all restrictions on the number of babies Boston has in 2023.

Why China is failing to increase its population due to 3 main reasons, the first being China’s internal migration, with the number of migrants, most of them rural-to-urban migrants, rising from 6.57 million in 1982 to 221.43 million in 2010.With an annual increase rate of around 10% from 2005 to 2010.

What China went through in the 1980s until the 2000s was its economy moving away from the agricultural economy into an industrial economy which meant the old rural population moved from working on the farms and in the rural economy and instead living in apartment blocks in cities.

In practical terms, this means that people who live in cities have fewer children because children become a short-term economic liability compared to working on the farm, where the child becomes free labour.

This is why people, after industrialisation, start to have a slow population decline for the Chinese; they are experiencing seven generations of industrial development in less than one generation.

With that comes seven generation population decline within one generation.

The decline in population means China won’t have the population to maintain a manufacturing economy.

This will increase the cost of manufacturing in China, which will raise the overall expense of manufacturing goods in China and will spread the cost to consumers.

That’s why the United States has moved to Mexico, which has a younger population that can manufacture consumer goods; the American public has become accustomed to cheap goods from manufacturing.

Chinese Deflation What Does It Mean
Photo by JW. on Unsplash

China Elder Laws

The Chinese Communist Party In July 2013, the National People’s Congress passed an unprecedented and controversial law: the Protection of the Rights and Interests of Elderly People (also known as the Filial Piety Law).

The law mandates that adult children provide culturally expected support to their parents 60 years or older.

China’s new “Elderly Rights Law” deals with the growing problem of lonely elderly people by ordering adult children to visit their ageing parents.

The law says adults should care about their parent’s “spiritual needs” and “never neglect or snub elderly people”.

What this law will mean for young couples hoping to have children’s chance of carrying that task out becomes far more unlikely with caring after their elderly parent and then their partner’s parent, which may mean a maximum of four elderly people to look after within their home.

With the duties and responsibilities, the chances of them having children become increasingly unlikely due to old people becoming more ill and suffering from ailments requiring more consistent care.

You couples may very well become resentful of caring responsibilities in regards to their parent and in-laws, which could put them off the idea of raising children to subjugate them to doing the same for them when they get older.

Furthermore, if you are wiping four asses of older people, it may very well put couples of wiping the arses of their babies and toddlers.

This isn’t even considering the travel costs of visiting parents or their medical bills, which will only increase with time.

With these added responsibilities, couples’ chances of having children become increasingly more remote.

Deflation and The Economy

That’s right; we’re talking about deflation with consumption plummeting, there are ongoing trade wars, an oversupply of goods and undersupply of demand in both domestic and foreign markets, and that’s not even the whole picture.

We saw deflation take over Japan in the 90s, and it took them nearly 25 years to pull themselves out of it.

The Japanese situation was leaps and bounds better than China’s current situation because when Japan had deflation and had to pay off its debt due to reindustrialisation after World War II in 1945, Japan managed to get rich before it suffered population decline and old age.

This means, in practical terms, that Japan is wealthy enough to pay for its elderly and has outsourced manufacturing worldwide, so it does not have to rely on its increasingly elderly population.

In contrast, China has failed to leap from an industrial economy into a consumer economy before its population gets too old, and due to this, we could be looking at the beginning of the end of China in its current form.

China suffered many wars and was divided several times during its long and bloody history. We may very well be seeing China going through hard times again.

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