On Monday, China’s Politburo, the CCP’s top decision-making body, announced that all married couples could have up to three children along with expanded government support for child rearing and education. It is widely speculated that this is driven by deteriorating demographics in China. In this week’s chart we observe the continued and accelerating upward trend in the 65+ age group versus China’s total population. The Wall Street Journal reported that the prime working age population (citizens between the ages of 15 and 59) has declined from 70.1% in 2010 to 63.35% in 2020. Age distribution is critical to economic vitality and notoriously difficult to alter and in China, the one child policy that was lifted in 2016 may have created a new norm because it lasted so long. The effect may be a permanently lowered replacement rate. We can’t help but find it ironic that the directive comes from the Politburo which is dominated by 60+ year old men (we could only find one female on its current roster). Another significant point that Peter Orszag, a widely respected former Washington budget official, notes in his Bloomberg opinion piece of May 11th, a declining Chinese population could mean lower carbon emissions, which is material since China’s total carbon footprint exceeds that of the entire OECD combined (27% of global GhGs). [chart courtesy Bloomberg LP © 2021]