There are many visible way in which demographics play themselves out in society, but most stem from the balance of workers vs. non-workers (either the young or the elderly). Generally, a country with more than 30% of its population under the age of 14 and less than 6% over the age of 75 is considered a “young population,” and is a situation most often found in developing agricultural societies without adequate health services (i.e. lower life expectancies). See Pakistan, for example.

The opposite problem is that of an aging population, a phenomenon observed across much of the West but also acutely apparent in Japan. The odd-man-out in terms of typical population shifts (from the youth-heavy pyramid of developing counties to graying tendencies of more developed ones), is China.

A recent Economist article commented:

China is known for its plentiful, pliable workers. But these incidents have cast doubt on that caricature… China’s labour supply is still growing. Its working-age population will increase from almost 977m in 2010 to about 993m in 2015, according to projections issued in December by the US census bureau (see left-hand chart). But the number of youngsters (15-24-year-olds) entering the labour force will fall by almost 30% over the next ten years… The ageing of China’s labour force matters, because older workers are less willing to move to the coastal factories that depend on migrant labour.”

Not that imbalances in China’s demographics are anything new. The coming reversal of the country’s youth-heavy workforce, the coming of age of a male-heavy generation (due to a male-biased culture, the one child policy, and the arrival of ultrasound in the countryside), and other patterns have been well-documented. But the effects of these are somewhat more opaque than that of a shrinking labor-force.

Will a decline in available labor enable Chinese workers to demand higher pay, better working conditions, or more benefits? Will it force Chinese companies to raise the prices of their finished goods, and will the brands selling these products then pass the cost onto consumers? Could labor strikes such as the recent one at a Chinese parts supplier give rise to a broader workers’ movement? Who knows for sure… As much as behavioral economists would like to be able to predict how people will respond to certain economic conditions, history has shown that the reactions of Chinese populations is particularly hard to predict…

After the Clinton years when people such as Richard Armitage (US Deputy Secretary of State from 2001-05) and Michael Green (Senior Director for Asian affairs at the NSC from 2004-05) came to power in Washington the concern of “Japan passing” receded from the minds of many Japanese politicians. The nomination of Obama and the return of the Democrats to power has rekindled the idea that America may again tilt more toward China. (Random Obama fact: He likes bulgogi and kimchi).

Interestingly, the fear in Japan of being passed (or ignored) doesn’t only apply to relations with the United States. In addition to the ongoing Australia-Japan disputes over whaling, current prime minister of Australia Kevin Rudd’s “widely celebrated Sinophile credentials” have also contributed to concerns that Australia will lean more toward China at the expense of relations with Japan.

So are Japan’s concerns about being “passed” (by the United States, Australia, or other bodies such as the UNSC) unfounded or warranted? Even if many of Obama’s advisers indeed turn out to be from the Clinton era, I think it’s unrealistic that Japan will cease to be an important US ally in Asia.