Predictions are Usually Wrong, Especially About the Future

One of the most popular prediction games among the curious cognoscenti is the "fertility prediction" game. One of the favourite tools of fertility predictors is the "TFR," the total fertility rate (PDF). TFR is only a statistical predictive tool, rather than an actual item of data. As such, it is likely to be wrong -- like most predictions about the future. Too many things about the TFR are subject to change, for it to be relied upon absolutely.

But there are biological limits which are difficult to overcome. Once a woman passes her age of fertility, it is very expensive and laborious to see her through a successful conception and pregnancy. When an entire nation of women "pass the point of no return," in terms of fertility, it becomes almost impossible to reverse the trend.

We know that this is happening in Japan and in some countries of Eastern Europe. But is it possible for such a thing to happen to a nation as populous as China, to a population as talented as the Han?

Today’s most important population trend is falling birthrates. The world’s total fertility rate -- the number of children the average woman will bear over her lifetime -- has dropped to 2.6 today from 4.9 in 1960. Half of the people in the world live in countries where the fertility rate is below what demographers reckon is the replacement level of 2.1, and are thus in shrinking societies. _Bloomberg

The falling birthrate phenomenon is most profoundly affecting populations that are more intelligent and more educated. Within the US, for example, it is highly intelligent and highly educated career women who are least likely to have children, on average.

...one country that worries American military strategists will also face serious demographic challenges. China’s rise over the last generation has been stunning, but straight-line projections of its future power and influence ignore that its birthrate is 30 percent below the replacement rate.

The Census Bureau predicts that China’s population will peak in 2026, just 14 years from now. Its labor force will shrink, and its over-65 population will more than double over the next 20 years, from 115 million to 240 million. It will age very rapidly. Only Japan has aged faster -- and Japan had the great advantage of growing rich before it grew old. By 2030, China will have a slightly higher proportion of the population that is elderly than western Europe does today -- and western Europe, recall, has a higher median age than Florida.

...China, notoriously, has another demographic challenge. The normal sex ratio at birth is about 103 to 105 boys for every 100 girls. In China, as a result of the one-child policy and sex- selective abortion, that ratio has been 120 boys for every 100 girls. From 2000 to 2030, the percentage of men in their late 30s who have never been married is projected to quintuple. Eberstadt doesn’t believe that having an “army of unmarriageable young men” will improve the country’s economy or social cohesion.

He thinks demographic change will pose two problems specific to China. Its society has relied heavily on trust relationships within extended-family networks. In a country where fewer and fewer people will have uncles, those networks will rapidly atrophy. The government, meanwhile, relies for its legitimacy on a level of economic performance that demographic trends imperil.

All in all, Eberstadt concludes, “we might want to have some additional new friends and allies in the world.” America’s growing ties to India, a nation he describes as “aging moderately,” strike him as promising. But he warns that it has not made the most of its population: “India has an appalling education deficit.”

Foreign-policy thinkers can often lose sight of demographic trends, Eberstadt says, because from a policy makers’ view “they tend to look really glacial. If it’s not happening in the next 48 to 72 hours, it’s not in the inbox.” But “population change gradually and very unforgivingly alters the realm of the possible.”_Bloomberg

It never hurts to remind oneself that a huge driving force of global commodities markets over the past several years has been demand from a rapidly growing and building Chinese economy. Should something happen to disrupt -- or interrupt -- Chinese economic growth, one might expect global commodities markets to experience a significant effect. It doesn't hurt to pay attention to these things, if you are at all connected to global markets.