With the evident abandonment of Deng Xiaoping's low-profile approach to international politics, China has increasingly reinforced its image as a regional hegemon in the making. Yet the image merely derives from the long-term extrapolation of its high economic growth rate for the last two decades, when the country became the world's second-largest economy and carried out a massive military buildup.
A careful analysis of China's coming demographic change, however, will negate the established image. Until recently, China followed a stringent one-child policy for several decades, resulting in a sharply declining birthrate and, with a generation-long time lag, rapid graying that is unprecedented in human history.
This means the country's shrunken working population will be burdened with paying the huge social security and welfare costs of their largely nonworking elders. These costs will surely lessen the former's purchasing power, effective demand and the nation's economic vitality, which will inevitably put a crimp on military spending.
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