Fester, I think you'll find you're on a hiding to nowhere with that line of criticism. I myself am among the harshest critics of the ruling communist party there and on most counts you'll find me vehemently agreeing with criticisms you have of them.

One problem China does not have is denial of infrastructure. Even within poorer provinces you have idiotically expensive infrastructure. You've hit on one of my pet topics of interest.

In fact, Nouriel Roubini, the economist who predicted the US housing financial crisis made this one of his chief observations when predicting a hard Chinese landing in recent press. (He made a number of fundamental errors actually, the airport he mentioned is actually pretty busy and the 'maglev' train he talked about isn't maglev) but his point was sound - the party uses large infrastructure projects as a means of stimulating the economy, many of them located in idiotic locations.

In fact on this site, another noted economist, Jim Rogers, goes into detail on China's water crisis, and mentions that the government can do large infrastructure projects, but can't organize things like small water-saving initiatives, because of endemic corruption.

http://www.businessinsider.com/jim-rogers-water-crisis-china-2011-5

And if your notion is that China can only do large-scale government projects, here is the world's largest mall. It's got a goddamn theme park in it, but it's 95% empty because it was built in an area that is mainly for poor migrant workers:

http://en.wikipedia.org/wiki/New_South_China_Mall

So whilst they can be criticized for one-party rule, silencing dissent, corruption and inequality, big ticket infrastructure items are something they are only too happy to do. They don't 'deny' anybody infrastructure.

They build far too much of it. But my central thesis, that economies of scale make these things possible, stands. It's when they're built without those economies of scale that we see grand failures, like the Dongguan mall, or indeed, some Australian projects like the public-private-partnership-built cross city tunnel where traffc was rerouted because it couldn't turn a buck on its own.

@TurnRightThenLeft: One problem China does not have is denial of infrastructure. Even within poorer provinces you have idiotically expensive infrastructure.

A new local perspective on China. Thanks.

You say they have made some dumb investments which looks to be true. But they have also made far sighted investments. Well one at least - their fast rail networks. I imagine they will come in real handy soon. And although spending too much on public infrastructure is a problem, not spending money on infrastructure can waste even more money. Those images of the 5 day traffic jam into Beijing spring to mind. And then there is what would happen if they didn't spend money on water ...

@TurnRightThenLeft:
http://www.businessinsider.com/jim-rogers-water-crisis-china-2011-5

He says they are spending billions on addressing the water problem. I thought those billions were being spent on re-routing the Tibetan snow melt to China. It's probably good thing he doesn't see wars as being disaster.

@Rhian: Rising GDP is fine, but its growth per capita will slow if productivity growth slows

Indeed, which is why I pointed out your like showed GDP per capita continued to rise despite the ageing population, and that it wasn't varying by much.

The point isn't that it is a non-issue. The point is this change looks to be something we will happily muddle through, at the cost of little more than few politicians careers. As such using as a justification for setting Australia's population at any level looks suspect to me, yet that is exactly how it is being used. It looked pretty clear to me that was the main point the article was making as well.

Ruth1
Major demographic changes take decades to wash through. Australia has positive natural increase in population although its birth rate of 1.9 births per woman is below replacement rate, because we have a large proportion of people of child-bearing age. But sooner or later our natural population change must turn negative unless the birth rate rises.

It’s the same in China. The forced transition from high to low fertility has not yet resulted in population decline, because the policy has only been in place since the 1970s. But for families that complied with the policy for two generations, 4:2:1 is the dependency structure. If a pure one-child policy were strictly enforced indefinitely it would result in a massive distortion of the demographic profile. (the current Chinese birth rate you quote of 1.8 is a somewhat higher than the 1.4-1.6 I have seen, but both show that many women have more than one child).

I agree it’s desirable that women have control of their own fertility, and when they do, birth rates tend to be lower. However, in many countries where birth control is freely available birth rates are still above replacement. People’s choices about fertility are complex and affected by many factors.

Rstuart
Yes, Treasury predicts that real per capita GDP will continue to grow. However, small differences in growth rates make a big difference to levels of GDP over time. If GDP per capita grows at about 1.4% a year in the next 40 years, as Treasury projects, then real per capita GDP in 2050 will be about 75% higher than it is now. If instead we sustained the per capita GDP growth we recorded in the 1990s (2.2%), then real per capita GDP in 2050 will be about 140% higher than it is today. That’s a big difference.

You’re right that economic and demographic changes will be slow, and however things pan out, we’ll adapt. But Treasury is right to focus on sustaining productivity growth because small changes in growth rates make big differences to living standards over the long term.

@Rhian - Sustainable choice
Where do your infrastructure numbers come from?

The figure of a $770 billion infrastructure deficit comes from Infrastructure Partnerships Australia (they wouldn't lie to advance a business case would they?).

Chris Berg also tried to pull the 'population growth = growth in gdp per capita' swifty. It's a lie. This was my response to him:

"But there is a clear relationship between population growth and the growth in living standards." Chris Berg

What is that relationship Chris? Norway, Denmark and Finland have all had low population growth rates and relatively stable populations. On the other hand, Australia and Canada have had high growth rates and burgeoning populations.

GDP per capita is not only higher in the European countries, it has grown faster than that of the 'resource rich' economies of Australia and Canada.

That is the "clear relationship" of population growth driven economics. It makes us relatively poorer.

You can see for yourself by comparing GDP per capita, population growth and population growth rates of various countries at these links:

pop growth http://tiny.cc/uv3ic

pop growth rate http://tiny.cc/10wdi

gdp per capita http://tiny.cc/5228r

-end-

Population growth helps the sharks at the top of the pyramid but the majority of fish, i.e. little fish, get picked off and are worse off financially let alone when the intangible economic 'externalities' like 'quality of life' are taken into account.

Play with those google charts. It shoots holes in the population boosters economic arguments.

A few observations -
1) I would like to see where the author gets his figures from? Acoording to ABS figures from 2005 -
"The proportion of Australia's population aged 45 to 64 years in 2005 was 24.5%. The total number of people in this age group rose from 4,864,000 in 2004 to 4,984,400 in 2005, an increase of 2.5%."
http://www.abs.gov.au/ausstats/abs@.nsf/mf/3235.0.55.001

Given that the above were from 2005 and the 45-64 age group, at that time, referred to those born from 1940-1960, the current figures would already be higher for the 45-64 age set and they will spike futher as the Boomer set start coming thru ove the next 10-20 years.

So, I don't know where the author gets his 4.1 million Boomers.

I would venture that OZ is much the same as the US, who have some 80 Million Boomers, which is about 26% of the US Population, which would give OZ just under 6 million Boomers.

In any event, although Salt is not a Demograhper, the idea of the Baby Boomer Bust didn't originate with him and if he has now retracted from a Boomer Bust position, he is wrong to be doing so, as it is certainly going to affect the OZ & Global Economy and, in fact, it already has.

But it's not alone, there are other issues keeping it company, such as -
1) Peak Oil
2) Massive Global Debt problems
3) Climate Change

Sardine

It depends what data you use.

Globally, levels of per capita GDP are low in developing countries where population growth is high. But growth in GDP per capita is faster in countries where population growth is high. In neither case can we infer causality and in neither case are the results especially relevant to Australia, as they are mainly due to the fact that developing countries have lower income levels but faster income and population growth than rich ones.

If you compare growth in per capita GDP with growth in population, there is a small positive relationship in the data (calcs from the IMF WEO database plotting 10-year growth in per capital GDP at purchasing power parity with population growth over the same period).
http://www.imf.org/external/pubs/ft/weo/2011/01/weodata/index.aspx

In Australia, medium-term per capita Gross State Product growth has been highest in the States with the highest population growth (WA and Qld) and lowest in the states with low population growth (Tasmania, New South Wales).