Dangerous inverted Pyramid

Abstract: "Is there too many Chinese people?" Ctrip (Nasdaq:ctrip) founder and chairman of the Liang Jianzhang of the book in China caused a stir. Liang Jianzhang, 43, is a class student at Fudan University and a master's degree from Georgia Tech at the age of 20.

"Is there too many Chinese?"

The work of Ctrip, founder and chairman of the Nasdaq:ctrip Liang Jianzhang, has sparked a stir in China.

Liang Jianzhang, 43, is a class student at Fudan University and a master's degree from Georgia Tech at the age of 20. Six years ago, when he created the Ctrip basic online tourism hegemony, Liang Jianzhang decided to return to campus. To seek the blending of knowledge and innovation is his greatest interest at this time. The foundations of the field of mathematics prompted Liang Jianzhang to look at economics, and Ctrip's entrepreneurial experience gave him particular attention to innovation, and in 2007 Liang Jianzhang began studying ph. D. in economics from Stanford University, which focuses on population and entrepreneurship and the Chinese labour market.

In the field of population and science and technology innovation, the Liang Jianzhang study found that the innovation ability of a country is closely related to the proportion of young people in a country. When a country's population ages, young people who are best suited to entrepreneurship and innovation are not only reduced in number but also less able to do so because these young people are not getting enough promotion in aging societies and businesses, lack of experience and personal relationships.

Correspondingly: China has one of the lowest fertility rates in the world, and, worse, its demographic structure will change dramatically over the next 30 years. To this end November 20, Liang Jianzhang and the United Mao, Xiaonian, Chen and other more than 30 mainstream economists and demographers jointly launched a signed proposal, called for the new national leaders to stop the family planning policy as soon as possible.

Now that China's reform is coming to a tipping point, the global IT industry is also entering a new cycle of new technologies, as mobile internet and cloud computing are rewriting the rules and patterns of the global IT industry, and China is struggling to follow suit. This is a huge challenge and a huge opportunity. Liang Jianzhang's view on population and innovative economy, it is meaningful to interpret the relationship between Chinese population structure and science and technology industry and the future development potential of China's science and technology industry. December 17 Afternoon, Liang Jianzhang This topic to accept this reporter's interview.

Dangerous inverted Pyramid

I would like to stress that China's economic environment has changed dramatically compared to the early 80, when income per capita was less than 300 dollars. In other words, all the prerequisites for the introduction of the family planning policy were no longer there, China was already a manufacturing-oriented middle-income country and would step away from low-end manufacturing in the next 20 years, developing high-end manufacturing and services. And now born children, 20 years later will be the high-end manufacturing and service industries, such as high value-added industries, these industries are not subject to the small per capita land size restrictions.

In fact, a country's innovative ability is closely related to the proportion of young people in developed countries. When a country's population ages, the number of young people who are best suited to entrepreneurship and innovation is reduced, as does the ability to decline, because young people are not getting enough promotion in aging societies and businesses, lack of experience and networking. Japan is a good example, the fundamental reason for Japan's 20 recession is its lack of innovation and entrepreneurial ability, which is closely related to the aging of Japanese enterprises and society.

On the other hand, talent is a lot of random events, really gifted entrepreneurs and scientists do not need to occupy too many social resources, as long as there is fair competition and selection of the environment, so the actual number of talents, depends on the size of young people, the larger the base, the greater the number of geniuses. China's current problem is not too much population, but too little.

"21st Century Economic Report": But this argument results that people are very difficult to empathize with, because we usually encounter resources for the first reaction or too many people. For example, once I chat with a friend of the video website, the video is not open, she joked: "The Chinese (traffic) too much, the video can not open." ”

Liang Jianzhang: Who made the video and the server? In fact, especially this video site and internet sites, people have a lot of advantages, because people have more income, the same income can buy more servers to do better service. But if you say that video web site business model is another problem, because it is a competition problem, the population of people bullish on the Chinese market, and then more competition, this is not related to the population.

Like this scale effect is very large, that is, you also 100,000 dollars to do a server, can serve 100,000 people, that service 200,000 people to buy a server, may not be 100,000 dollars but 50,000 dollars, because the distribution technology. So in fact it has a large scale effect, especially in software and High-tech, the same invention can have more people to use, it will be more profitable level, which and it in a niche market is very different.

In fact, the environment, employment, education, medical care and other problems need to rely on investment, technological progress and human resources. China's population will show zero growth in the near future, and with China's rising social productivity, China has the ability to control and solve the resource and environment problems. Conversely, if China's population continues to age and the cost of supporting the elderly is rising rapidly, it will worsen the government's financial situation, but not the future environmental protection.

Economic Report 21st Century: Your view is that more people are not bad, and may not delay the sharing of wealth?

Liang Jianzhang: Whether China is more people or less, there is consensus in the academic community, but there are still some questions, so the purpose of our proposal is to let more people know, let the decision-makers know that people are not necessarily bad for the economy, at least the stable demographic structure is certainly better than the inverted pyramid population structure for the economy.

There are some key misconceptions here, such as whether a population dividend can be brought in. This may be the case in the short term, but a reduction in children means that the working population will be reduced within 20-30 years, so by the year 2015 the workforce in China has fallen, the dependency ratio has risen and the demographic dividend has begun to become negative. Similarly, the population and houses, the negative correlation of assets per capita in fixed assets, such as infrastructure and equipment, is also short-lived, as assets are ultimately created by people, and population growth reduces the amount of assets per capita in the short term, but in the long term the new workforce creates more wealth and assets, and the per capita assets are not directly related to the population

More than 200 years ago, Malthus, the British economist, had put forward the famous "Markov population theory", a theory that is still quite market today. The Markov population theory says: technological progress, economic development, rising incomes, increased fertility, population growth, declining per capita land and falling per capita income are a year-on-year relationship. He said this when human beings just entered the industrial revolution, the economy is mainly agriculture, production technology progress slowly, a small amount of progressive improvement will indeed be quickly offset by population growth, and the excess population will only reduce the per capita land ownership, as a drag on economic development.

But this theory, which describes the relationship between the ancient economy and population development, is completely unsuitable for the law of modern economic development. First, agriculture is in a very minor position, with less than 5% of the agricultural sector in the developed world, and less than 12% per cent of China's agriculture, followed by the logic that the reduction in productivity is not in the modern economic industry and services. Population growth is bound to consume more resources, but the binding of resources on industry is not as strong as the binding of land on agricultural production.

In fact, in the past 20 years, the American economist Paul Rommel's endogenous economic growth model is well-known, he said: the more population, scientific and technological innovation faster, economic development faster, that is, under certain conditions, the population advantage can be converted to economic growth advantage. The condition is that the country can absorb advanced technology from other parts of the world and have the ability to innovate and market.

Economic Report 21st Century: What is the first big drawback of family planning policy to national innovation?

Liang Jianzhang: According to the sixth census of 2010, there are now 1.34 billion people in China with a fertility rate of 1.18, below the replacement fertility rate of 2.1, which means that each generation is almost halved, while the birth rate has fallen to the world's minimum of 0.7 for couples who are mostly double alone in childbearing age. It is very important to know what the consequences of such a low fertility rate will be: China's demographic structure will change dramatically over the next 30 years, a very dangerous inverted pyramid.

Compare the demographic structure of China in 2010 and 2040: The total population of China in 2040 is around 1.4 billion, But older people aged 60 and above will increase from 171 million to 411 million and 20-60 working-age population from 817 million to 696 million, while the most dynamic 20-40-year-old population will drop from now 436 million to 302 million, down more than 30%. That means that by 2040, the largest population in China was the 50-60-year-old.

The relationship between innovation and GDP per capita

21st Century: Does China have its own scientific innovation capability? The Internet industry seems to have a common sense that most of China's innovations are copied from the US.

Liang Jianzhang: "There is no basis for China's lack of innovation, because, on the contrary, from the data, I am referring to a number of comprehensive innovation indicators, in fact, China is the most innovative in the country of income per capita." This must have to do with GDP per capita, and when that number is low, you create an iphone and nobody buys it.

Now all the countries in the world are copying the United States, you and the United States than it is not at this stage, at least 10 years and 20 years, now the next stage of China is to catch up with South Korea and Taiwan, China is currently not likely to have a revolutionary products such as Apple. But China is in fact likely to have companies like Samsung. But are you saying that Samsung is innovative? I feel certain that at some point in history Koreans and Japanese are also saying, "How can we innovate and copy Americans?" But this stage is to copy, you copy of the strong.

This is not a matter of urgency, China is the number of these companies, the government can not play a big role, the education theory is not too much to say, the culture does not play much role, the Chinese entrepreneurial spirit is no less than any other people, the government just maintain a stable environment, and then do not excessively intervene in certain industries, Don't take too high a tax.

But innovation is really important, compared to other countries of the same income level, you are high in the future growth potential will be high, that China over the past few years has a higher potential for growth, which also indicates that in the next few years China's economy will develop rapidly. One more thing you should be aware of, is that American innovation is actually closely related to the baby boom after World War II, and by the 80-90 years of the last century the United States has nurtured a vast and highly qualified young population that has created High-tech companies such as Microsoft and Apple, and the recent eruption of Silicon Valley is actually a total talent explosion.

"21st century": China's current per capita GDP is 4000 U.S. dollars, 2020 per capita GDP will reach 10,000 U.S. dollars, and by 2040 China's economy will surpass the United States, but per capita income than the United States.

Liang Jianzhang: One of the most important events of the 21st century is actually the rise of India. Now India's GDP per capita is only 1500 U.S. dollars, 1/3 of China, but it has entered a fast track of economic growth, and in 2040 India's per capita income will reach 10,000 U.S. dollars. Although India's overall level of development is 20 years behind China's, the average education level and the quality of the population are not as good as China's today, but Indians are as diligent as the Chinese.

In particular, although India's per capita income in 2040 is only 1/3 of that time, with its world number one population (India 1.6 billion, China 1.4 billion), India is expected to surpass the U.S. as the world's second-largest economy, half the size of China's economy. And unlike China, when India reaches the level of a moderately developed country, it maintains a relatively young population structure because the Indian government was strongly opposed by voters when it tried to introduce family planning in the 80 's, without imposing mandatory family planning.

In 2040, not only did India work more than China (850 million-700 million), but India's 20-40-year-old young workforce would be 50% (450 million: 300 million) more than China, when India had completed universal higher education, and college students and young researchers would be 50% more than China. India's economy continues to grow at a high rate, while China slows as the population ages.

The United States is another strong competitor to China's economy in the 21st century. The United States is the highest fertility rate in all developed countries, has remained close to the replacement level of 2.1, the same time the U.S. population structure is far more healthy than China. China's economy has gone far beyond the US in 2040, but its per capita income is less than that of the United States, and China's median age is 50 years, and the median age of the United States is only about 40 years old.

"21st century": What do you think of the relationship between age and entrepreneurship?

Liang Jianzhang: I think future innovation will become more and more difficult. Now we can learn some American things, but when your income is high to a certain level, the economy matures to a certain level, you must be a true innovator. This will require you to learn more and more knowledge, as now the doctor may be 30 years old to graduate, before maybe more than 20 years old can also invent things.

On the other hand, the most energetic, the most willing to take the risk of time in fact, or around 30 years old, although the life of people have been extended, but this rule has not changed. 20-Year-old Energy may be the best, but the things may not be enough, knowledge accumulated to a certain degree and experience or position to a certain degree, in the industry has a certain relationship and networking or even word-of-mouth, and then energetic and willing to take risks, this time is just about 30 years old. Therefore, the future of innovation will become more and more difficult, and the window of business is actually shortened, and when the younger population is decreasing, it will be further magnified.

"Release as soon as possible."

"21st century": in your book did not see your policy advice, you are advocating a year release is two years, put child or all put?

Liang Jianzhang: Of course, we hope to put it all as soon as possible, because a society if each person can only give birth to two, because a large number of people are only one and a large number of people do not live, so there must be a lot of people want to give birth to three to make up. Suppose a society 40% life Three, 30% life two, 20% life one, and 10% people do not live, that total is two. In this case, 60% children will come from three kids.

In fact, most children have to come from three-child families, as in the United States.

"21st century": There are also some research institutions may worry that the full release of the possibility of a short period of time to cause a lot of people, the Chinese population suddenly soared?

Liang Jianzhang: We did some research, actually not, and a while ago I saw that some statistical agencies have come up with some very scary numbers, which is completely impossible. Because you can't assume that everyone is willing to make a living, in fact, 40-year-olds are already very young, and 35-year-olds will be a lot smaller, but the number of people who are only 25-30 may be higher, but their supplements are unlikely to be filled in a year, and everyone may have a plan.

So in fact it's just been able to grow, you have to take into account the current Chinese downward pressure is very large, and the number of women of childbearing age is less, most of you are already the one-child generation, just can make up a little, is to slow down the population of the pressure, so it is right A common phenomenon in population economics is that in a country in the process of industrialization, the rise in per capita income is bound to accompany the decline in fertility, as the cost of developing high quality children is increasing, the level of education and participation of women is increasing, As well as the modern life-rich social entertainment that further squeezes family life and raising children, many young people opt for late marriage, single, and some simply don't want children.

Chinese fertility is also following the same pattern of development, and since China is now the only country in the world to implement a one-child policy for the majority of the population, the fertility rate is lower than in countries with the same level of development. China's fertility rate is now well below replacement levels, but with inertia and longevity, China's population will continue to grow for some time, peaking in about 10 years and shrinking rapidly.

21st Century: You posted a post on Weibo to recruit the 30-Year-old Chairman's assistant, but note that a mother who has had at least two children is preferred. What do you think?

Liang Jianzhang: (laughter) In fact, is to express my attitude, that it is a priority, not to say that must be so, in fact, I later recruit only one child.

From a purely financial point of view, the development of a child is a loss-making and social profit, and other governments in the world are encouraged.