IN HER NOVEL, Scattered All Over the Earth, Yoko Tawada imagines a world in which Japan has physically vanished and Japanese-ness survives only with a handful of natives and Japanophiles. While the archipelago isn’t likely to disappear (if it did, a lot of us would, too, in the seismological cataclysm), the demographic equivalent isn’t too farfetched — not only for Japan but other countries in East Asia. The population of the Land of the Rising Sun is sinking rapidly and, by the turn of the next century, will shrink to about 75 million people from the current 121 million. China has already lost the title of most populous nation to India and will decline from 1.46 billion now to 780 million by 2100. South Korea? It’s now a little over 50 million people; in 77 years, the projections have the country at under 20 million. (In contrast, its bellicose rival North Korea will roughly maintain its population and have 2 million more people than the South by 2100).

In a column this week, Shuli Ren says Hong Kong has come to the conclusion that to populate three artificial islands plus an enormous housing project it is spending as much as $128 billion on, it needs, well, population. Indeed, its demographics will decline precipitously from more than 8 million to 1.3 million in 2100. “For the next three years, the government will hand out HK$20,000 ($2,556) — the price for a dim sum banquet on the classy side — in cash for each baby born to a parent who is a permanent resident,” she writes. “Those who want to seek assisted reproductive services, such as in-vitro fertilization treatments, can receive a tax allowance of up to HK$100,000.” As Shuli says, it is a desperate attempt by the government to justify expensive infrastructure projects that no longer make economic sense.

Japan, in the meantime, has run out of workers. “Over half of the country’s businesses say they can’t find enough full-time staff,” says Gearoid Reidy. One in 10 people in Japan is now over 80 and octogenarians may soon be filling jobs like taxi driving if a rule change takes place. There’s very little slack in the labor market, “Nearly 87% of the working-age populace is employed, well above the 79% average of countries in the Organization for Economic Cooperation & Development,” says Gearoid. Next year could bring another crunch: That’s when new regulations will kick in limiting overtime in the trucking industry. “Estimates say it could result in a 14% drop in transportable cargo by 2025, ballooning to 34% by 2030.”

Automation can probably help Japan and Hong Kong (and China and South Korea) in terms of productivity and manufacturing efficiencies. But robots aren’t consumers — and economies focused on perpetual growth will cease to expand if there are dramatically fewer people around to buy things. Perhaps it’s time to retarget economic efforts on sustainable, more equitable prosperity rather than ever-greater largesse.

Relaxing barriers to immigration could help keep the old growth models going, but that will require cultural adjustments from reflexively xenophobic countries. If these nations come around to it, there are rescuers at hand. The population of the Philippines is projected to practically double by 2100. We Filipinos aren’t robots — and we like to travel.

IT’S NOT JUST ASIA …
Rishi Sunak’s days as UK prime minister appear to be numbered, whether or not he survives the plots his fellow Tories are fomenting against him. As Adrian Wooldridge wrote this week: “The disintegration of the Conservative Party is happening faster than the Conservatives feared and Labor dared hope.” Labor Party leader Keir Starmer has already started to issue promises about what his prospective government will do to build Britain better — including build more housing. The trouble with that, says Matthew Brooker, is: With what workers? He writes: “Construction is in the midst of a yearslong labor crisis. The industry’s workforce is smaller than it was in 2007, while the shortfall of housing has accumulated since then.” What remains of the industry’s supply of workers is also aging fast.

Matthew says: “The proportion of work done by over-50s has risen, from about a quarter of total hours worked in 2007 to 33% as of 2021, government data show. The amount performed by the youngest, from 16 to 29 years old, dropped over the same period. If you were designing a workforce to take on a future of significantly scaled-up housing construction, you wouldn’t start from here.”

While the UK’s population isn’t shrinking, it also isn’t growing particularly fast. A contributing factor to the laborer deficit is, of course, Brexit and its concomitant curtailment of workers from the EU. There’s no way Starmer can say “never mind” about the divorce.  That ship has sailed.

TELLTALE CHARTS
“The Big Four of Indian offshoring giants — Tata Consultancy Services Ltd., Infosys Ltd., Wipro Ltd. and HCL Technologies Ltd. — have hired half a million engineering graduates in the past three years. Two of the companies have indicated they won’t be going to campuses this year, according to an article in the Mint. This is a big blow. It seems, the industry is mimicking its clients by employing generative artificial intelligence tools like ChatGPT to boost productivity. If AI is going to permanently reduce the number of entry-level programming jobs in an average year, then youngsters need to pick up other skills to improve their chances. It’s better to let them know when they’re yet to hit the job market.” — Andy Mukherjee in “India’s Sell-Side Researchers Should Say What They Mean.”

“The increasing presence of international investors in the UK stock market looks at first glance like a success story for London. But it’s really a tale of declining domestic ownership and a resulting leadership vacuum among shareholders. In theory, the nationality of owners shouldn’t matter. In practice, the withdrawal of the home crowd puts UK companies at the mercy of opportunistic hedge funds when they need to raise cash.” — Chris Hughes in “There’s a Reason Why UK Stocks Need UK Owners.”

BLOOMBERG OPINION