Does the aging of China have strategic implications for the United States?
A3: Potentially, yes. To begin with, we now count on vast inflows of surplus Chinese savings to finance our federal deficit and maintain adequate levels of domestic investment. When China’s age wave arrives in earnest in the 2020s, its savings rate may fall precipitously, forcing us to find another banker. The aging of China’s population also increases the risk of social instability—or, to avert that danger, an authoritarian clampdown. The many stresses of modernization, from a widening income gap to environmental degradation, have so far been bearable in a youthful China in which incomes are rising rapidly. They may become less bearable in an aging China in which economic growth is slowing. Q4: Will the aging of its population halt China’s economic rise? A4: The aging of China’s population is a dangerous speed bump, but it need not result in a crash. In any case, the period of peak danger lies over the horizon in the 2020s. By then, China will already have overtaken the United States
