Step back from the eurozone crisis and falling commodity prices for a minute and consider the role of demographics in investments. In just five years China’s workforce will start to shrink. By 2030 the median age of Japan’s population will be 51 and in China it will be 43, according to Deutsche Bank. By 2050 the share of 65 year olds in the population in most of Asia will more than double. Asia’s demographic dividend is almost over and its impact is far reaching.

Japan’s depleting workforce has been directly correlated with the demise of its economic growth for the past 60 years. That is not to say China’s economy will stagnate as its workforce shrinks, but it will hurt labour costs further. In spite of moving manufacturing to lower-cost inland China, Foxconn (a supplier for Apple) has increased wages by more than a quarter this year. Moving outside China means supply chain constraints more than offset any labour cost savings. No more cheap technology or plump profit margins then.

There are implications for asset allocation too. The theory goes that older investors prefer bonds to riskier assets such as equities. Economists Zheng Liu and Mark Spiegel reckon equity valuations will fall as the aged sell shares to finance retirement. That will not help crushed valuations in Asia, where the Shanghai Composite trades on 12 times earnings, a fifth below the S&P 500.