February 24, 2004

Aging Asia, the China Bubble

On the plane to Mexico tomorrow, I'll be reading Nicholas Eberstadt's "Power and Population in Asia," which you can find here. Haven't read it yet. But I read, maybe from the man who linked to it (www.dandrezner.com) what sounded like a good description: Japan got rich before it got old. China is going to get old before it gets rich. Discuss. What looks like the money graph: "Thus, China's rapidly graying population appears to face a triple bind. Without a broad-coverage national pension system, and with only limited filial resources to fall back on, paid work will of necessity loom large as an option for economic security for many older Chinese. But employment in China, today and tomorrow, will be more physically punishing than in OECD countries, and China's older cohorts are simply less likely to be up to the task. The aggregation of hundreds of millions of individual experiences with this triple bind over the coming generation will be a set of economic, social, and political constraints on Chinese development, and power augmentation, that have not as yet been fully appreciated in Beijing, much less overseas." Incidentally, this is why I think the best way to invest in China is not invest in China, but the countries and companies feeding the Chinese boom. You get China's boom without the best--if you do it right. Do it right? Try Australia. That's the theme of the March issue, which I hope will be on-line late this week or early next.


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