Xinhua reports that the government is currently deliberating about what to do with China’s infamous one-child policy. Officials are discussing many fundamental aspects of the policy, which has some sources predicting that the entire system may be completely abolished by 2015.
IB Times reports that the director of the propaganda office at the National Health and Family Planning Commission Mao Qun’An commented “Our commission is organizing research on the size, quality, structure and distribution of the population so that we can propose plans to improve the policy. We’ll have to move cautiously and coordinate between current situations and long-term objectives.”
The policy was instated in 1979 from an effort by Mao Zedong’s government to lessen the strain of overpopulation in China. Twins, ethnic minorities, rural populations, and parents who also were raised in a single child household are exempt from this rule, as are the populations of Hong Kong and Macau.
Some 400 million births have been prevented since 1979 because of the policy, however as The Economist points out, the shrinking population resulting from the one-child policy is creating a demographic nightmare for the country. An aging population, coupled with an artificially low birthrate, have created the “4-2-1” situation, where one child has to care for two parents and four grandparents. The controversial policy has also contributed to a contraction of China’s workforce in 2012, which is only set to decrease in the coming years.
Although the antiquated policy is met with fierce criticism, many are divided on whether ending it will be enough to readjust China’s skewed demographics. CNBC shared the insights of Zhiwei Zhang, a chief China economist at Nomura who shares further implications of removing the policy.
A rise in the country’s birth rate could lead to a decline in the savings rate, said Zhang, which may weigh on investment growth. A higher savings rate means more money is available for investment. On the positive side, however, a higher birth rate would help rebalance the economy towards a more consumption-driven model.
Economists at the Bank of America Merril Lynch predict if the policy was relaxed there would be an increase of more than 9.5 million babies born every year in China.
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