It isn't, but similar forces are at play in China due to parallels in the economic strategy. Like Japan, China followed an export-led manufacturing model based around its cheap currency and a large, skilled labor force, along with massive government investment in infrastructure. And like Japan, this has contributed to a massive property bubble that is growing increasingly dangerous.
? Hasn't prices for property fallen by quite a bit this and last year? Or that it got popped a little?
At the end of the day, property in Tier 1 cities will be expensive as they are economical centres for big regions and where people congregate, I do see the chinese government getting cities to make cheaper apartment housing specifically for younger people to help alleviate this problem (remember seeing some articles about some cities apparantly already testing this).
All in all, I'm not overly worried about any kind of huge 'crisis' happening due to housing or a property bubble, since it will be handled.
The benefit China has vis-a-vis Japan is that, as a sovereign country, it has not been possible for the US & allies to force it to appreciate its currency. Even today, the yuan trades at 0.14 to the dollar, which is merely a ~15% appreciation compared to twenty years ago.
By contrast, the Japanese yen was forced to appreciate ~90% against the dollar in just a few years after the Plaza Accords. So Japanese exports basically became twice as expensive relative to US exports, erasing its over all competitiveness and creating the modern impression that Japanese products are "nice but expensive."
Nonetheless, the property bubble, if allowed to grow, will lead to a similar credit crunch and liquidity trap as Japan suffered during the lost decade. We're already feeling it in Chinese consumers' recent reluctance to spend and invest.
You need some sources on this last paragraph.
Here's the issue - a country with a youth bulge can get away with a lot, assuming it is competent. Credit expansion, for example, is very easy to argue for a country with TFR > 2.1, because the assumption is that a growing population = larger economy in the future, so lenders and investors are perfectly willing to extend lines of credit, betting on future growth. This is much harder to argue for countries with < 1.5 TFR, because investors and lenders simply have a hard time believing future generations will be able to pay back what their parents borrowed.
Well, the chinese state has
a lot of control over the lenders (banks), so that's a big part of the problem solved. I don't see the problem with investors though, since they are gonna go and invest in companies and stuff where they expect/hopes for returns on their investment.
Just the same, in terms of company culture, you can get away with a lot more with young people - long hours, quick turn arounds, rapid pivots, lots of risk taking, and of course, low pay. This is why start ups tend to favor youths - they're cheap, they're aggressive, and they're willing to bet on work that's high risk, high reward.
By contrast, older people, particularly middle aged and later, just aren't willing to do any of those. And that affects company culture, leading to the inevitable creation of "dinosaurs" that are set in their ways, filled with bureaucratic red tape, and which aren't willing to take risks. Older people want security above all else, and that results in an economy that is more about preserving the status quo than challenging it.
Sure, but working with young people also has risks, such as inexperience which can be a really big deal in many cases, while older people will have that experience for their field (comments on this video but also in this video around 18:00 gives very good examples;
).
Not to mention we had articles here in this forum both about how young heirs to smaller factories we're improving and increasing efficiency in the factory (digitizing, using new tools etc.) but also about how bigger companies we're management and higher ups we're releasing power and letting the younger and lower positioned people do more decisions, including making and releasing new products etc. and how that actually was rather successful.
This is why, even though the effects of demographics often aren't immediately obvious, I am convinced that they are, in fact, massively significant in determining the trajectory of a country and its economy. Aged countries - whether it's Europe, Japan, or South Korea in the near future - are less innovative, less entrepreneurial, less risk taking, and in general, less competitive in emerging industries. Where they do well is relatively stable, legacy industries where experience counts for everything. This is why Japan remains strong at industries with high barriers of entry and minimal disruption, like ICE cars and high precision components.
But they're terrible at emerging industries, and as emerging industries overtake legacy industries, Japan and countries like it will inevitably decline. This is why I keep saying, "demographics is destiny."
Oh, demographics is definitely massively influential, not arguing that.
But you seem to put way too much weight on demographics alone, and not on other factors, or just handwaving them away, and saying they aren't that 'core' and wouldn't be a problem if demographics are good, which I disagree.
Like if we put some imaginary numbers, then say demographics becoming bad (say long time ~1.2 to 1.3 TFR) could have some ~x0.9 multiplier to the economy, but other things such as 'cultural stasis' that you mentioned earlier might also have a x0.92 multiplier and then add a lot of other factors that might be around the ~x0.85 to ~x0.95, it will end up being a big multiplier on an economy that results in said economy stagnating (since there would be various other positives multiplier as well).
On the other hand, it really reads like you think demographics is a massive, say ~x0.5 multiplier while all the others are only of ~x0.9 in comparision.
