China abandons one-child policy

China abandons one-child policy

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China’s 36-year-old one-child policy has arguably been the largest ever governmental attempt at social engineering. It is estimated to have prevented more than 400 million new births. Now the Communist Party Central Committee has announced that it is to be changed. Couples are to be allowed to have two children but penalties, including fines, loss of work privileges and indeed enforced abortions will still be applied to parents who go for a third child.

As a strongly peasant society, historically children, and lots of them, not only strengthened a family’s ability to prosper but also provided support and protection as parents moved in to old  age.  The 1979 one-child policy was therefore hugely unpopular in those areas where it actually applied. From the start the policy was actually shot through with exceptions. In certain circumstances a second child was possible if the first child was a girl. The restriction was also less strongly enforced on ethnic minorities.  That explains in part why, despite the policy being introduced when the population first breached the one billion mark, it now stands at 1.3 billion. Another important contributory factor has been the improvement in life expectancy.

The reason for the policy’s original introduction was the fear that China’s population would completely overwhelm the country’s ability to feed and house it. Some blue-sky policymakers worked out that the ideal population level was 700 million. Thankfully the authorities in Beijing did not actually try to reduce it by forbidding certain classes of couples from having any children at all.

Draconian though the one-child policy may have seemed, it has on balance done more good than harm. As China has prospered, that prosperity has been shared among less people. The lower cost of bringing up a single child has encouraged people to save and invest, boosting the economic momentum.  It has also allowed the country’s ferociously competitive education system to flourish as students aspire to better things, backed up by their eager parents who can afford to make the sacrifices necessary to give their single child a good start in life 
The obvious downside has been that China is an aging society. Old people’s homes are crowded. The supply of labor from the countryside to the great urban manufacturing centers is drying up. Shortages of workers mean that companies are having to offer higher wages. Given that it will be at least 15 years before the consequences of the end of the one-child policy kick in, the Chinese economy may very well face considerable cost pressures which will make its domestic manufacturing less competitive. Prepare to see Chinese commercial giants move some of their production offshore to cheaper economies elsewhere in Asia or even Africa.

It also seems unlikely that there will be a sudden population explosion. The Chinese have seen that the advantages of smaller families on balance outweigh the traditional mass of siblings. The expanding economic cake is giving almost everyone a larger slice of prosperity. China certainly needs more young people but the authorities in Beijing will be hoping that the expansion in population will keep in stride with the growth in Gross Domestic Product, the per capita measure of national wealth. That way the hardly glimpsed specter of unemployment will remain distant and with it the loss of harmony and the threat of social unrest.

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