China Abandons One-Child Policy

After 35 years of its one-child policy, China has decided to raise the limits to two children. After considering its economics and social plan for the next five years, concern was raised over the availability of the working force – those 15- to 64-years-old – in future years. In fact, it has become evident that retiring population will soon out number the younger, causing a shortage.

This decision is also in response to long social ailments. Because China’s culture prefers male children, there has been years of an unbalance ratio between the two genders. In fact, last year for every 116 males born, 100 females were born. Additionally, in order to maintain population standards, some women have been forced into abortions and others have been sterilized.

This decision has unraveled economic effects. For example, the recent rise in the New Zealand exchange. The economy is heavily reliant on its milk industry. Hopes are that the increase in children will lead to increase in demand for more milk in China. In addition, baby care company’s like Goodbaby International Holdings Ltd saw a surge in their stocks.

Still, after so many years of this standing policy, some couples are reluctant to take advantage of the two-child policy. They cannot imagine being able to handle the extra financial and emotional burden of another child. In contrast, others couples who would have otherwise left China in order to have a second child will now get to stay in their home country and raise two children.

While it is still unclear how big of an effect this new policy will have in regards to the population of China and the global economy, it signals a shift in the country’s outlook. In the short run, China will still experience shortage of workers and increase pay. However, in the long run, families may move back to China and other will grow, stabilizing worker population and wage. Also, this is the first step China will take before fully transition to a fully consumer based economy.

By: Taruna Manni


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