WHAT IF CHINA ADOPTS A TWO-CHILD POLICY?

You might remember the threat of the “Population Bomb”* back in the 60s and 70s, which pointed to a Worldwide population growth of two percent, and a reduced mortality rate.  That combination could lead to roughly doubling the population of the Earth every 30 years.  Thus, the World would be overcrowded and far outstrip resources, dooming Humanity.  Luckily, the Earth had its own agenda.

China responded by establishing a One-Child Policy, in 1979, under Deng Xiaoping.  Its population growth had already risen faster that its ability to supply sufficient food and basic services.  That law was hard for many Chinese, especially the poor, since adult children there are expected to support their Parents in their Old Age.

Although China has the largest national population of 1.3 Billion, it’s workforce is aging.  Younger workers are moving to the major cities for the higher-paying, consumer-class jobs; however, the bulk of the country’s industrial needs are still in the lower-paid day-labor sectors.  So, this will create an increased drag on the economic growth.

China has been gradually moving toward establishing a Two-Child Policy; however, that will take a generation to even begin to alleviate the problem–if it can.  As the younger generation pursues college studies, delays marriage and, in general, becomes more urbanized, this problem becomes considerably more complex than merely, once again, trying to manage the population growth. Additionally, only 60% of couples who currently qualify for an exemption under the One-Child Policy have expressed interest in actually doing so.  So, today’s China is not the same as it was in the 1970s.  A higher Standard of Living and urbanization appear to have changed Family Planning Concepts.

In prior Blog Posts, I have suggested that China cannot possibly continue its past outsized economic growth.  The linked article from NewScientist describes this situation in more detail: http://www.newscientist.com/article/mg22129615.200-what-will-happen-if-china-adopts-a-twochild-policy.html?full=true&print=true#.UzAXJlyBIb0.  Rather than looking for a solution, however, China appears to be counting the noses of newborn babies.

The real problem here is Management–well…actually the Mismanagement of the Economy.  The insufficient Population Growth is merely a symptom.   Managed Economies are fraught with problems.  You cannot solve what you ignore or don’t understand.  Market forces, although not always perfect, are generally preferable in the long run.

* The original suggestion of a Population Bomb was peedicted in a 1798 essay by British Economist (Robert) Thomas Malthus which suggested that the Population grows exponentially; but, the Food Supply only grows arithmetically. And thus, Food functions as a check on the Population Growth.

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