Within the next 15 years, China could become home to the world’s most elderly population — the country is expecting more than 400 million people over the age of 60. The fear is that the world’s second-largest economy will no longer be able to maintain growth. In response, China ended the one-child policy that was enacted in the 1970s. Now, couples are allowed to have two children. Marketplace’s China correspondent Rob Schmitz explains how this may affect China’s economy.
On the significance of ending the one-child rule:
I don’t think it’s that surprising…. This is big news, symbolically. Today marks an end to an era in China’s history when you had an entire generation of only-children, much of urban China. When you look at this through the lens of history, it is important. But when you look at this moment for China’s future, it’s a little different. I don’t think this is going to have as big of an impact on China’s economy going forward as some people may think. We have to remember here that China is still limiting families to two children, and many urban Chinese who now outnumber their rural counterparts feel like they really can’t afford more than one child. That said, when I told my 40-year-old babysitter of my two sons the news of this when it broke, she told me, “Gosh, I wish the government would have ended this policy 10 years ago!” She was a little sad about it. She and her husband followed the rules. They had one son, and she told me she and her husband would have had another child if the government would have allowed it, but now she feels like it’s too late for them.
On China’s economic backdrop:
For all the people who say, “Oh, you know, I can’t afford another child” — China is a very big place. It’s not just Shanghai and Beijing. You’ve got a lot of medium-sized cities out there that are more affordable to live in. It also is a very family centered society, so there are just as many families that will opt to have two children. I think this has been very welcome news for a population that’s seen its own economy slow down in their own lives. In some ways, you’ve got to wonder if China’s leadership was considering their country’s changing economic reality when they made this decision. China’s economy is entering a slowdown period. The country is embarking on a historic transformation from an economy based on building things to one based on consumers buying things, and allowing people to have slightly bigger families might be the Chinese government’s way of throwing its people a bone of sorts. Doing something they know will make its citizens happy, because the leadership knows full well that they have tough times ahead.
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