As reported in The Deficit Delusion, Sam Altman and other Silicon Valley giants are in the midst of a bet. It concerns not if, but when the first one-man “unicorn” will reveal itself.
Altman and friends’ wager is useful to keep in mind as demographic experts promote the narrative that China faces a troubled economic future due to falling birthrates. There’s very little to this crisis.
Consider Chinese billionaire Jack Ma’s MYBank. Ma’s lending innovator has pioneered the 3-1-0 model for providing collateral-free loans to businesses.
So, what is 3-1-0? It’s very simple. It takes MYBank loan applicants roughly 3 minutes to complete the virtual bank’s online loan application, and just 1 second to achieve loan approval. Where “0” comes in is that there’s zero human involvement from MYBank in the processing of the loan application or approval.
MYBank’s wholly mechanized lending business shines a bright light on the flaw in the low-birthrate narrative. The latter is rooted in dated notions about the role of humans in the workplace.
While it’s certainly true that AI and other advances will no more reduce living human beings to breadlines than did cars, computers and WiFi, it’s similarly true that stupendous economic leaps will increasingly require fewer and fewer people to achieve. This plainly informs the wagers entered into by Altman et al, and it’s vivified in Chinese businesses like MYBank. Furthermore, it’s not just the wildly effective automation of financial transactions that is creating a commercial future very different from the present.
Consider the proliferation of robots recently discussed at the Washington Post (“The Chinese robots are coming”) by Helena Xu and Helen Zhang. They note that in 2024 alone, over 300,000 robots were installed in Chinese factories. Across the same timeframe, 34,000 robots were put to work in the U.S.
Contemplate the above assuming robots achieve even a fraction of their potential. While fewer Chinese are being born, those coming into the world are innovating in ways that will render the babies of today and tomorrow the productive equivalent of hundreds, thousands and tens of thousands of babies born before the era of machines that can not only do for us, but think for us.
It's useful to keep productivity leaps rooted in production and thought top of mind with China’s future economic growth in mind. It’s speculated that fewer people foretells reduced demand and declining economic growth in China. The speculation is errant.
That’s because all demand is an effect of supply, and as the rise of robots and machine-driven economic activity indicates, future production in China will make that of the past and present appear primitive by comparison. Such is the genius of machines, as Americans know rather well.
Lest readers forget, when the 19th century dawned 75% of Americans worked on farms. Birthrates were high because machines were nearly non-existent. Fast forward to the 21st century, and something less than 1.6% of Americans toil on farms, while the rest eat more than ever thanks to productivity that grows by the day.
What’s been economically true for the U.S. will be true for China. As human beings we’re not remotely static. That we’re not foretells a bright economic future for those lucky enough to be born at a time when machines that do and think for human beings free those same humans to do and think as they never have before.
