A break for demographics

Two demographic stories caught my eye today:

The first was about child trafficking, or actually, trafficking of expectant mothers to China to sell the children. And the price was so low, at least to my Western eyes – a child is worth just $1,750 to $3,500 or so! So sad.

One of the reasons for this is the Chinese demographic imbalance, with a significantly higher number of boys than girls. Normally, the sex ratio of most species is 1:1, or 1 boy for every girl. According to the World Health Organization (WHO), the human sex ratio is actually 105:100 or 5 more boys born for every girl. As the WHO explains:

Nature provides that the number of newborn males slightly outnumber newborn females because as they grow up, men are at a higher risk of dying than women not only due to sex differentials in natural death rates, but also due to higher risk from external causes (accidents, injuries, violence, war casualties).

The number of men and women should normalize to something like 1:1 in a population, as men die of stupidity, among other causes.

In some countries, the figure never normalizes because of a preference for girls, sadly. In China, there are around 105.5 men for every 100 women. And this will likely rise to a high of 106.3 to 100 in 2020 before it slowly starts to fall. Because every number in China is a big number, that means there are more than 40m more men than women. That means there are 40 million men that are unable to marry or start a family because there aren’t enough women for them.

THE DIFFERENCE BETWEEN MALES AND FEMALES IN CHINA HAS BEEN GROWING FOR THE PAST 55+ YEARS. SOURCE: WORLDBANK; CALCULATION BY VIETECON.COM

AND IT APPEARS TO BE NORMALIZING AT THESE HIGH LEVELS. SOURCE: WORLD BANK; CALCULATION BY VIETECON.COM

Vietnam is the opposite, with a larger number of females than males, by a small, albeit growing, number.

VIETNAM IS THE OPPOSITE - MORE FEMALES THAN MALES. SOURCE: WORLD BANK, CALCULATIONS BY VIETECON.COM

It appears that Vietnamese children may be seen as a way to fill in the imbalance in China by some unscrupulous people.

The second piece of news I saw was about the risk that Vietnam will “get old before it gets rich,” according to an article in Asia Times. In positive news, the Vietnamese life expectancy is quite high at 76 years, and it should grow over the next few years. We are seeing slowing population growth rates in Vietnam at the same time, meaning that the average age of the population will climb (it is currently one of the fastest aging populations in Asia, according to the article).

The ratio that is important here is the dependency ratio or the ratio of people dependent on working adults. This will increase to 62.4 by 2050, with more than half of this (35) from the elderly. This is up from a low of around 42 in 2013. That was the peak and it will get steadily worse as we move forward in time.

GOOD AND BAD NEWS IN THESE NUMBERS. SOURCE: WORLD BANK

There are multiple ways to fix this. Vietnam could increases its population growth rate by getting people to have more children. Given the trends in the rest of the world, this seems unlikely. Trends in other countries show lower and lower fertility rates, driven partially by choice and partially not. Higher living costs don’t help.

Or there could be more immigration to Vietnam. It’s a poor country, though, so probably only people from even poorer countries would think about immigrating, like Cambodians or Laotians, both of which have lower incomes. Neither are large countries, which means that Vietnam is unlikely to see a big wave of immigrants from either. Plus, both could go to richer countries that are also close, like Thailand. Language issues, at least for Laotians, would be much lower there. Immigration has its own challenges, as most of the Western world has seen. It can result in some very strong reactions. See: Brexit, Trump, the rise of right-wing governments in Europe.

We will have to see what happens, but these two paragraphs from the article scared me:

An International Monetary Fund (IMF) report last year argued that “Vietnam is at risk of growing old before it grows rich.” Indeed, when Vietnam’s working age population, or the number of people aged 15 to 64, reached its demographic peak in 2013, annual gross domestic product (GDP) per capita was just over US$5,000.

South Korea and Japan, by comparison, reached this peak demographic when their average incomes were $32,000 and $31,000, respectively. Vietnam is not even close to that income growth trajectory: the government projects GDP-per-capita won’t reach $10,000 until 2035.

I need to do more work on this, but I found these two stories interesting today…