(SPONSORED) — The world population is growing, but what effect does that have on the United States? Tatiana Bailey, Director of Data-Driven Economic Strategies explained why China has a big impact on population growth and decline.
Bailey explains China comprises of almost 20% of the world’s population, which currently stands at 8 billion. Bailey said China’s population increases are much of the reason the world’s population started to increase, around 1800.
According to Bailey, when the world’s population was in the millions, families would have many children that would die due to childbirth or disease. However, around 1800, improvements in public health caused population growth to become logarithmic. Once a couple had four children and all of them lived, population growth happened quickly.
However, Bailey said the opposite is also true, once couples go down to having two or even one child, the population declines rapidly and Bailey said that is what is currently happening in China, largely due to the one-child policy it implemented in the 70s, in fact, Bailey said last year China had more deaths than they did births, with India poised to become the most populated country this year.
Population increases have strained the world’s natural resources and have created climate pressure, with most of the current population growth happening in Africa.
The world’s population is projected to reach 10 billion in about 60 years, stabilize at that level and then fall, according to Bailey. What does that mean? Bailey explained a population decline will have an impact on the U.S. economy.
As Bailey explained, as China’s population increased, more people began to move to urban centers where manufacturing occurred, and the abundance of cheap labor allowed countries like the U.S. to benefit from cheaper goods. Similarly, as more Chinese people had increased living standards, they bought more U.S. goods. Unlike in Japan, where a declining population is occurring in a county of high wealth, China’s population is declining with more people on government assistance. According to Bailey, that means we will have fewer exports and more expensive imports.
“It will take time for this to play out, but not a good thing overall in these inflationary times,” said Bailey.