Why I’m So Pessimistic About China’s Future
China faces some massive secular issues
For those who’ve been reading my stuff for a while, you will know that I’m pretty bearish on China. Economically, China has been terrible for a while. Leadership-wise, it just keeps getting worse as China shifts more and more into an authoritarian dictatorship. But China also faces some massive secular challenges beyond just its real estate crash and its political shenanigans.
Aging population plus youth unemployment
The fact that both of these are hitting at the same time is extra painful and they will produce long-lasting consequences for China’s economic and social health.
And these issues are connected. Due to the weak economy, there’s just not enough jobs. Thus, the old are being prematurely pushed out of the labor force with little to no savings. At the same time, because of the dearth of jobs and the fact that anyone with a job is holding onto it for dear life, the young are finding it extremely hard to enter the labor force.
This is creating a double-sided economic disaster. The old need money in order to live and China’s pension system, especially in rural areas (where most people live) pays peanuts — on average $20 to $30 USD per month. Unable to find or afford proper…
