With declining population, China set to lose comparative advantage as an ‘attractive investment destination’: Report

Beijing [China], May 14 (ANI): With the declining population, China, which is also known as the “factory of the world”, is set to see a decline in the economy as “cheap labour” has also dried up, EPardafas reported.

Recently, the United Nations Population Fund data revealed that India surpassed China as the most populous country in the world.
India now has 1428.6 million people, surpassing the Chinese population, which is currently at 1425.7 million.

In the past three decades, China has scripted its story of spectacular economic growth by arranging the supply of cheap labour from its abundant population, thus making the country an attractive destination for global investors to set up manufacturing bases.

But as the population declines and the supply of cheap labour also dries up, China stands to lose the comparative advantage it has enjoyed in the global market as an attractive destination for investment.

The secret behind the growth story of China is the inhuman exploitation of its workforce by the state machinery so that the coffers of the Communist Party of China can be filled up, reported EPardafas.

Wage rates in China have also started increasing. Common people in China are no longer prepared to be subjugated by the ruling Communist Party of China; as the open rebellion against draconian lockdown measures in the big cities in China like Shanghai and Beijing toward the end of 2022 has clearly shown.

Like all command economies, the weakness of the Chinese economy is the failure to develop hi-tech consumer goods industries which are the engines of growth.

The mandarins of the CPC also fear that the declining growth rate of the population in China will also mean a shrinking domestic market with fewer customers for finished products. This will lead to a decline in the demand for goods and services and thus slow down the economy.

Under the rule of President Xi Jinping, with its aggressive behaviour to bring the world under its control, China has been shunned by other countries. With increasing isolation, China will find it increasingly difficult in the coming days to sell its products in the international markets and will have to depend on its home market for economic growth. Fewer customers in the domestic market will make things difficult for China in the coming years.

Jobs based on cheap labour have already started to move away from China, so there is a need to create more high productivity high-value jobs. Unfortunately for Beijing, the productivity of labour in China is still far below Western standards, according to EPardafas.

Automakers from the United States had been investing in Chinese manufacturing facilities and testing the potential of selling in the USA cars built in China. Major car brands in Germany like Volkswagen have been producing cars in China for decades.

Now with the shift in Sino-German relations, the three German car majors, BMW, Mercedes – Benz, and Volkswagen, are rethinking their strategies in China. The deteriorating business and political environment are counting a lot, together with human rights abuses indulged by the Chinese authorities, as per the report in EPardafas.