Contrarian investors looking for a reason to believe China will not become an economic superpower need to look no further than the country's looming demographic disaster.
China's much-lauded development model has emphasized massive infrastructure investments funded through the capture of increasingly large swaths of the global supply chain of manufactured goods.
Key to this model's success have been policies designed to attract foreign direct investment (FDI), government subsidies for key industries, and an inexpensive labor force eager to migrate from urban to rural areas in pursuit of economic opportunity.
But China's economic growth has also taken advantage of its demographic dividend, a unique moment in time during which China's fertility rates dropped due to the one-child policy, while life expectancy increased through access to more modern healthcare. The net result was more workers entering the labor market, with fewer elderly in need of support.
The ongoing enforcement of the country's one-child policy means its once young and vibrant labor force will soon transition from contributing to China's economy, towards needing to draw resources out of the country's thinly supported pension and healthcare systems.
The full implications of this are only now beginning to be felt. What most policy makers now realize is that the one-child has set in motion a reversal of China's demographic dividend that should cast suspicion on the inevitability of the country's economic ascent.