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Sat May 7, 2016, 09:38 AM

China’s Population Decline Dooms the Transition to Consumer Economy

China’s Population Decline Dooms the Transition to Consumer Economy
by Chris Hamilton • May 7, 2016


[font color="blue"]And yet, China’s total debt goes parabolic.[/font]
By Chris Hamilton, Hambone’s Stuff


If a business could foresee that it would have a declining consumer base (declining number of total potential customers), that would likely be a pretty good reason for serious concern and significantly lower growth expectations. However, when it comes to China, the shrinkage of its under 65yr/old population and particularly of the 20-59yr/old population is somehow coinciding with the story of China transitioning from an export-based to a domestic consumption-based economy?

To wit, with a declining population, China will transition from exporter to consumer, while all those grown one-child-policy adults support their 65+ year-old parents, and still grow 6%-7% annually? Inquiring minds wonder how it’s possible a declining base of consumers would consume more.

In a word…CREDIT! And, the growth of credit in China has gone parabolic. It’s highly unsustainable and likely ruinous.

The Details:

Each bar in the chart below represents annual growth or decline of the Chinese adult population. The blue line is a 4 period moving average of the population change. From 1973 through 2008, an additional 12.5 million Chinese adults entered the Chinese economy every year. That meant 12.5 million more consumers, home buyers, car buyers, potential job seekers, etc. ...............(more)

http://wolfstreet.com/2016/05/07/china-population-decline-dooms-transition-to-consumer-economy/




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Reply China’s Population Decline Dooms the Transition to Consumer Economy (Original post)
marmar May 2016 OP
pscot May 2016 #1
Warpy May 2016 #2

Response to marmar (Original post)

Sat May 7, 2016, 10:46 AM

1. Meet the new global economy

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Response to marmar (Original post)

Sat May 7, 2016, 07:46 PM

2. Rubbish.

The central government just has to find a way to distribute the wealth generated by the workers instead of having it all funnel upward toward their own 0.1% elite.

There are over a billion potential customers in China. They just need to be paid well enough to buy.

Sound familiar?

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