China’s population shrank last year for the first time in 60 years, and the number of inhabitants decreased by 850 thousand to 1.41175 billion at the end of 2022. The Chinese miracle is fading after half a century of tremendous development the likes of which humanity has never known, perhaps with the exception of the industrial progress of the Americans in the second half of the century 19 and the beginning of the 20th century.
The shrinking of the number of residents is the beginning of a process that will last a long time despite the Chinese government’s efforts to prevent the decrease, this is in contrast to the “one child” policy that was introduced for decades and changed the face of Chinese society and the family. Deputy Chairman of the Committee on Agriculture and Rural Affairs in the People’s Congress, Cai Fang, says that China is at the beginning of a population shrinking process despite a push by the government to increase the birth rate. The shrinking process will be accompanied, as it was in Japan, by a continuous increase in the age of the population, which means more old people who need care at increasing costs and fewer young people who need or must take care of their parents and grandparents.
Several provinces such as Shenzhen offer financial grants to families of two or three children up to an amount equal to $5,500 and credit points for income tax purposes. Life in China, which has become expensive, requires huge investments in a child in order for him to achieve and be able to study in prestigious universities. This way he will earn well for decades and will also be able to repay his parents and family in his old age. The prices of houses and apartments, education, health services are so expensive that there is almost no chance that parents will be tempted to increase the number of children they bring into the world.
The birth rate in China dropped last year to 6.77 births per 1,000 inhabitants, compared to 7.52 births per 1,000 the year before. In 2022, the year of economic difficulties due to the corona virus and the quarantine, accompanied by layoffs and wages that did not catch up with the rate of inflation, one million fewer children were born than the year before, in 2021. Only 10.62 million were born in 2022. Also the number of Chinese who died, mostly old , apparently jumped due to the corona virus, the most since 1976, 7.37 deaths per 1,000 inhabitants. The Chinese Central Bureau of Labor Statistics clarifies that the scope of entering the labor market is still greater than the demand, meaning that there is no shortage of working hands.
Between the president and the virus
Tsai Peng says that the demographic changes and the aging of the population will force China to make changes in the pension structure, in the treatment of the elderly and in taking care of their health, which will naturally burden the financial structure of the country, which is burdened with a budget burden that will harm economic growth. The Chinese economy is already faltering, the government announced that it would grow in 2022 by only 3%, the lowest growth rate in decades. Naturally, it is impossible to grow at fast rates as China grew from an agrarian country hungry for bread turnips to an advanced industrial country that threatens the American hegemony.
The closure for three years, because of the corona virus, also hurt growth. In addition to this, the megalomania of the current president who elected himself for an indefinite period, who also serves as the chairman of the Communist Party and Minister of the Armed Forces, Xi Jinping, dragged him together with the Communist Party to suppress some of the entrepreneurial activity of the successful high-tech industry, and simply led to a retreat in entrepreneurship and vision that were in order China’s share for two decades.
When the president and the party saw that the lockdown and suppression of high-tech was harming the country, they decided on one day, at the beginning of the year, to cancel all restrictions on the angry residents, some of whom had been in prison, their own home, for several years. Something has faded from the menacing power of China that was on the rise. It will have to reconsider the Western countries with regard to foreign relations, its military expansion in the South China Sea as well as its aggressive foreign policy to conquer more and more markets. China will not go back to trying to enslave Africa, through loans to build infrastructure projects that Africa, by definition, cannot pay.
The world needs a new industrial and consumer giant that may not immediately replace China, but will go alongside it and be able to offer the world excellent industrial products at reasonable and competitive prices. The fall falls on India whose population already exceeds that of China, 1.42 billion people, and will continue to rise towards 1.7 billion people in the decade between 2050-2060. According to estimates by the United Nations and other demographers, in 2100 India’s population will already drop to 1.53 billion Indians – double that of China, whose population will plunge to 0.77 billion Chinese.
India is attractive to investors and businessmen because of its continuously growing high-tech industry, India’s successful citizens serve as managers and heads of leading high-tech companies in the world, especially in the US. Just as Israel enjoyed and still enjoys the potential of the Israelis in the American Silicon Valley, who make rounds back and forth and disrupt the Israeli economy , the Indian community in Silicon Valley in California also contributes and can increase the contribution to the mother country,
India. Unlike the Chinese, whom the Americans seek to remove from access to their high-tech secrets, the successful Indians in the US are accepted and are not suspected of having the potential to transfer sensitive knowledge to the mother country. This is a tremendous advantage of India over China, which is priceless, especially against the background of continued strained relations with the current administration of the USA under the leadership of President Biden as in the administration of President Trump. Both parties in the US are united in fear and hatred of Communist China.
everything stays in the family
In recent years, India’s growth has been increasing to an annual rate of 7-8%. India is still very poor compared to China. The GDP per capita, with a life expectancy of 70 years, is $2,260, compared to $12,560 in China, where life expectancy has been increasing and economically burdensome for 78 years. In terms of purchasing power, the gap is lower, the GDP per capita in China is 2.3 times higher than in India. Although the per capita income is relatively low, the population in India is young, with enormous consumption potential as reflected in young families with no limit on the number of children. Provision of services to the young population also gives impetus to international investors in India.
India has inherent disadvantages. Over the years the industry dominated by ancient family conglomerates, arrogance, disdain for workers from lower social classes. Production mainly for the local market hungry for goods and services, whatever they may be, without the ability to choose the best goods or the most reasonable services. The Indian market has not been exposed to significant competing imports from abroad, although in recent years China has significantly increased the export of its products to India in the field of advanced technologies for households, such as mobile phones.
Another weakness of India is the comfort of the local industry, which is happy in part with a huge domestic market, has not yet made enough efforts to move to an effective international export policy in order to examine the practices of its industry. Now India is taking first steps, which is very important. Let’s recall that Israeli exports and the demands of Israel’s trading countries in the world are what pushed Israeli industry to become self-sufficient, to become more efficient, to calculate, to meet international standards in terms of product and service quality, and also to adapt the product to the final consumer abroad.
It was this exposure that brought Israel tremendous achievements, while the traditional industry, which is not exposed to competition and export needs, was left behind with low labor productivity that only the customs protections and various regulations still allow it to operate with only slow growth. India must learn from China how it did it, if it is a life goal, and not be satisfied with the domestic market.
India’s weakness is also in its inadequate infrastructure system, railways to ports, highways, modern airports, internet and advanced energy systems. Still only 99% of the residents have access to electricity, compared to 100% in China. In India, only 46% of the population has access to modern sanitation, toilets, compared to 70% in China. Only 43% of households have Internet access in India, compared to 73% in China. Another weakness of India is the investment in education and knowledge, which is significantly lower than that of China.
More Japanese than Japanese
The hope for India lies in the leadership of the United States, which brings together a number of countries that can stand against China in the economic, technological and military fields, together with Australia, Japan and India that cooperate with it. Hope for India will now come from an unexpected direction, security and military cooperation with Japan, which has decided to double its military and security budget from 1% of GDP, as imposed on it by the American occupation authorities at the end of World War II, to 2%. The two countries, India and Japan, already decided a few months ago on joint air exercises as part of military cooperation against the Chinese giant.
The Indians call on the Japanese to invest in India’s military industry and military equipment industry, to strengthen military relations between them. Let’s recall that India is a long-standing customer of Israel in the field of military, defensive and offensive equipment, and recently due to the North Korean threat and the strengthening of China, the Japanese are also really interested and are ordering Israeli military equipment.
The Indian elephant in the room in relations between Japan and India is India’s refusal to take any action in the security field that could harm its relations with Russia, which is based on its war in Ukraine. India refused Japan’s request to allow transport planes to land on their way to Ukraine in order to provide military equipment for the war against Russia. India does not want to anger Russia, which was its ally for decades when the US sided with Pakistan, its sworn enemy. In addition, India’s thirst for Russian oil has increased in recent months by tens of percent, while the West limits the price of Russian oil that the West is allowed to pay to Russia and imposes other restrictions on Russian oil through Western sanctions.
It therefore follows that India’s rise to the forefront of the strategic, security, economic and technological stage will not be easy at all if there is no change in foreign policy and a reduction in the forces of local conglomerates. In the coming years, despite China’s bubbling shortcomings, it will still be economically, technologically, militarily and politically dominant. India cannot serve as a military-technological alternative in Southeast Asia, certainly not immediately.
Japan (Photo: Reuters)The Americans, aware of India’s weaknesses, chose an immediate military alternative, Australia. In cooperation with the American, the mineral continent intends to discuss in about six months strategic defense and attack systems for intercontinental ballistic ranges, far from the long range of China. Command and control systems are already being built as the Australian continent has never approached them. The only potential for cooperation with China under the guidance of the US is Japan and Australia.
China can relax, for now, despite its vulnerability because India is out of the big military game. The new military systems of the Western countries are very expensive to build, control and maintain, and only the rich like the USA, Japan and Australia will be able to invest and maintain. The Israeli industry, and especially the defense industries such as Rafale and the aerospace industry, will have their hands full with work and orders as soon as the fall falls in Canberra. As the rich West arms itself, India will continue to hope to be a supplier of relatively ordinary goods, such as motorcycles, alongside advanced software services.