When it comes to global hegemony the main event is the US and China. This will remain the case for the foreseeable future. China has been making its objectives increasingly clear in recent years and I anticipate that pattern will continue and probably accelerate.

Demography is destiny, as the French chap Comte once said. The pattern of demography and wealth follows a well established path: as countries get richer, the fertility rate reduces, which results in an ageing shift in the country’s population structure until a new equilibrium is established. Of course, some countries adopt a high immigration policy to keep up the supply of younger to middle aged people. That works only if the country maintains that rate of immigration indefinitely. Australia and the US are immigrant nations. China, on the other hand is not. There are no queues at the immigration counters in China. Border security officers in China assigned to the immigration desk have one of the world’s most boring jobs.

So China’s population shape depends entirely on the fertility rate. And here lies the tricky issue. Take a look at the following chart of the US population structure, both historical and with UN projections to 2100.

The total population is growing. The workforce age cohort (25-64) is growing. The retiree cohort (age 65+ is growing but does not get too close to the workforce cohort numbers. Having a healthy surplus of workers to retirees, students and children is essential for economic vitality, growth and social cohesion.

Now look at the equivalent chart for China.

The workforce cohort (25-64) has already peaked and is now falling. That’s a big deal. Meanwhile, the retirees are growing in number. There is a rapid squeeze that will take a grip of the Chinese population structure over the next 40 years and generate really difficult economic constraints. A lot of China’s growth in the last 30 years has come from a transition of agricultural labour into industrial labour to support new manufacturing of goods that have been exported all over the world. That transition is largely complete. There is no easy source of new cheap labour still making its way to the industrial cities. Productivity gains and new investment will be the only sources of future growth. But a demographic structure as projected by the UN combined with a Communist state do not give me much hope that the Chinese people will be able to match the productivity gains of a liberal democracy.

China could well be the first country to grow old before it grows wealthy.

Now, I don’t expect the Chinese Communist Party to meekly roll over and say “Oh well, we tried.” Communist regimes fail – that much we know. But they don’t go quietly.