One Child Policy in China

Pete raised a very good topic about the One Child Policy and the decision of investing in China or not. Here is Pete’s first post.

Also– Jian Shuo Wang, this is a little off-topic but I had a question myself. I was at a business conference recently where an international consultant was speaking– he’s one of these people that gives advice to American businesses, on where to invest abroad.

Anyway, he said something that shocked me quite a bit. Many of us have been planning investment in China for a while, but this consultant– who used to be a Chinese investor himself– is now advising all of us to avoid investing in China and to focus instead on Latin America, India and Vietnam. The reason for his advice, he stated, is China’s One Child Policy– he said China should get rid of it immediately, within maybe two years, or the investment consultants in the USA are going to recommend that US companies pull all their money out of China.

I don’t know whether he’s right or wrong, but he’s a very important and respected retail business consultant, and he said that China now has the world’s worst demographics, possibly the worst in history, due to the One Child Policy. He said the policy has caused China’s birth rate to plummet rapidly to about 1.6, way below replacement level very suddenly, causing a rapidly aging population with too few young workers to support the senior citizens. In fact, he said China is getting old before getting rich, thus getting old faster than any other country in history. He also said the problem’s even worse since some minorities in China (like the Muslim Uighurs if I recall correctly) do not have to worry about the Policy, only the ethnic Chinese, so the Muslim population in China rises rapidly while the Chinese fall in population, leading to further ethnic conflict. Moreover, he said that due to One Child Policy, China now has a massive excess of boys to girls, which can lead to wars in later decades. He said that due to the One Child Policy, China will probably suffer a massive economic collapse by about the year 2025.

He said that China should instead focus on better education and health care, which would naturally reduce birth rate while improving the Chinese economy, while discontinuing the One Child Policy. He said Chinese population should stabilize gradually to replacement, not fall rapidly like this.

Now, I’m raising this issue, because frankly, I don’t know whether he’s right or not. I always thought the China One Child Policy was applied only in the big cities like Shanghai, not in the countryside, so people in rural and suburban China, and in the small cities, can still have large families with many kids. Also, I thought people who wanted more than one child could easily overcome the policy, just pay a small fine or hide their kids or something. In other words, I thought China still had a relatively high birth rate.

But now, this consultant has gotten me concerned. I myself have been planning to invest about $10 million in China, and my fellow businessmen at the conference wanted to invest as well, so this is possibly $1 billion that we’re planning to invest in China, but now we’re unsure whether to do it. Honestly, if that consultant is correct, then we’re not going to invest in China. But, I’m not sure if he is correct.

This is your chance to prove him wrong. If I don’t hear any refutations of that consultant, then I’m changing my plans, and I won’t be investing in China. But if you can convince me he’s wrong or that the One Child Policy is changing, then I’ll put my money back into the Chinese retail market. I just need better information, and I figured that you might know something.

Posted by: Pete on June 18, 2006 09:01 PM

Second related post:

Jian Shuo Wang,

OK, now I’m *really* worried. A friend sent me a link that further talks about some concerning things regarding China’s One Child Policy, from a business perspective:

http://tinyurl.com/kq838

Look, this is very serious, and I’d like to have more solid, knowledgeable, accurate information on this. I don’t know whether this article is right or wrong, but if it’s true, then the One Child Policy– if it continues for several more years– is going to be doing tremendous damage to China’s economy within about 15-20 years, and if true, then I and thousands of my business colleagues are not going to be investing in China. We’ll be putting our money into places like India and Vietnam instead. I actually think the One Child Policy was a smart idea for China for a while, as it slowed population growth and probably helped China’s environment and urban planning to proceed at a more manageable pace back in the 1980’s. But it’s not supposed to be a permanent policy, and if this article is correct, then the Policy is doing more harm than good.

As Shrek7 was pointing out, it takes years– in fact, often more than a decade– for a business, especially if invested in a foreign country, to become profitable. For us to feel confident about investing in China, we have to feel confident about the economy’s long-term prospects there, and if the One Child Policy continues, we’re not going to have that confidence. Again, I’m still not sure how accurate that article is, but if it is accurate about the effects of the Policy, there are three big concerns that we as foreign investors in China have to worry about:

1. The elderly-to-worker dependency ratio. China and all other countries do have to stabilize their population, for the sake of the world environment, we understand that. But when stabilizing a large population, the best way to do it is similar to the best way that you stop a car in a snowstorm, if it’s skidding on ice on the road– you do it gradually so that you come to a smooth stop and then keep moving on the road. If you slam the brakes on too fast, then you skid like crazy and flip over, off the road.

We’re worried that with the One Child Policy, China has slammed the brakes on too fast, with China’s population aging faster than any other in history. The One Child Policy focuses too much on sheer numbers and not enough on the population and age distribution– you need to have a reasonable number of young workers, and not too great an excess of retired elderly. I realize that China can do things like raising the retirement age (to, e.g., 72 or so) and encourage people to work longer while they’re healthy before receiving pensions, also helping elderly people to stay healthy and productive, but you still need a decent ratio of young workers to have a good economy. As the economy and education improve, people prefer small families and the population stabilizes gradually, anyway.

If the One Child Policy has indeed sent the Chinese birth rate plummeting to 1.6 or 1.7 suddenly and creating a vast excess of elderly, then this is obviously not a formula for a healthy economy– if China is filled with hundreds of millions more retired elderly than young workers, then the country’s savings would be depleted and business would grind to a halt. As businesses especially in the retail sector (dependent on consumer savings and spending), we’re not going to invest our money into such a country.

2. The male:female ratio. This article and others, are implying that in much of China, the male:female ratio at birth has hit something like *130:100* due to the One-Child Policy. For rural families especially, if they’re forced to have only one child, then they’ll want a boy to help out on the farm– whereas if they can have more children, they don’t worry about this so much since they’ll have roughly equal numbers of boys and girls.

If true, this is unacceptable and it could be disastrous for China in about a generation, and we won’t invest our money there. Societies in history with large excesses of men or women have almost always been politically and economically unstable– you really need to have a roughly 50:50 ratio of each sex. Otherwise, China in 15 years for example, might be having a massive excess of young men to young women, with the result being that hundreds of millions of young Chinese men wind up not being able to find a woman to marry. Societies like this almost always have massive social problems when they have millions of embittered young men without partners– higher crime, increased warlike tendencies, depression, generalized social dysfunction. I realize that people can partially make up for the imbalance by e.g. importing brides from places like Vietnam, the Philippines or Korea, but this is a very limited solution. A society with this sex imbalance is probably not stable, and it’s not a good place to invest our money.

3. The differential birth rate problem. The consultant warned us that Xinjiang is a “demographic and political time bomb” since the Han Chinese are subject to the One Child Policy while the Muslim Uyghurs are not. So the Han have only one child per couple, while the Muslims have 5 or 6. I once read an article on this and history has shown how dangerous it is. Serbia lost Kosovo because the Serbs were having only one child while the Albanian Muslims were having 7-8 kids per couple. Shiite Muslims have a much higher birth rate than other groups in Lebanon which has made them close to a majority. The US Southwest is re-acquiring its Mexican and Latino culture and character since Latinos have a much higher birth rate than whites. (Southwestern states like California, Arizona and Texas were actually part of Mexico for many centuries, but the US invaded Mexico in the US-Mexican War and seized half of Mexico’s territory in 1848, which is why those territories are now part of the US.)

With the selective One-Child Policy, according to this consultant, China is producing its own Kosovo in Xinjiang. It would be a much better idea to have a uniform policy for everyone, also try and integrate more Uyghurs into the larger economy and make them less reliant on agriculture, help them find good jobs both within and outside of Xinjiang, and so on.

The result? If these articles and the consultant’s warnings are true, then the One Child Policy, if continued for several more years, is forcing China into a massive demographic, economic and political crisis in a few decades, and we’re not going to invest our money there. We’ll put our money into places like India instead.

Notice that this has absolutely nothing to do with the numbers of English-speakers that India has. English proficiency is by far the single most overrated and useless factor in attracting foreign investment. As retailers especially, we couldn’t care less whether workers in India or China become fluent in English or French or German or whatever– obviously, we’d be hiring mostly among the local people, and we’d be selling our products to them in the local languages and dialects, whether Mandarin in China or Hindi, Bengali, Tamil or the other local languages in India. Training more English-speakers in China would do absolutely nothing to help increase confidence among us foreign investors.

On the other hand, we do care a lot about demographics in China over the next 20-30 years, and India, for all its flaws, has much better demographics than China, if these articles are true. India’s population growth is also slowing rapidly, but at a more gradual pace overall than China, and it’s due to voluntary measures– like better education and availability of contraceptives– in India, rather than forced measures like the One Child Policy, which don’t necessarily help to increase wealth but force population growth down too fast. Thus, India is starting to look like a better place for us to invest our money in the coming decades, unless China soon changes the One Child Policy.

It’s funny, because as I’ve been writing this, another old friend of mine has written to suggest that the articles on the One Child Policy *are* flawed. He’s confirming my initial hunches– that the Policy really doesn’t apply much to rural regions, that the Policy is not really enforced much, that wealthy urban couples just pay the fine and have 2-3 kids if they want, that people just hide their kids or migrate if they have e.g. 5 or 6 in the countryside. He also says that China’s true fertility rate is much higher than the official figures since the official numbers underestimate it– rather than 1.6-1.7, it’s more like a little above 2.1, at replacement levels. If he’s right, then maybe things are OK. But I admit, I’m frankly confused right now. And the truth is, most of my business colleagues have been hearing the very scary things about the One Child Policy from the consultants and the articles, and if the One Child Policy goes on for a couple more years, they’re going to lose confidence in China and invest their money elsewhere.

Please don’t ignore this post, please don’t shuffle it around or disregard this issue as unimportant and talk about trivial things. We’re talking about hundreds of billions of dollars (or Euros) in investment here from US and European companies. We’d like to invest a lot of it in China, but the One Child Policy is making us nervous. Honestly, a lot of us are confused and we hear a lot of contradictory information. How does the policy actually work? Can you chart out myths and truths about it? If the One Child Policy has forced fertility down too rapidly and caused China’s population to age too fast– which would be a very bad thing, as I explained above– are the Chinese authorities in the process of changing and loosening the policy, to encourage voluntary small families (and better economic growth and infrastructure improvement) instead? I’d greatly appreciate clarification here.

Posted by: Pete on June 19, 2006 04:36 PM

The third very good effort to find out solutions to the problems.

Well, I always tell my employees who are complaining about one problem or another, that when they’re done complaining, they should try to be productive and suggest solutions. I guess that applies to me as well, so in the spirit of trying to be mildly productive and offer helpful ideas, I’ll put myself in the shoes of a Chinese policy planner– please feel free to use this for a separate topic if you want.

I admit that I don’t have all the information here and I’d like to have more accurate data. But if I were consulted to draft a population, immigration, development, environment and nutritional policy for China– which stabilizes population but preserves economic growth and the environment (while encouraging investment from people like us)– the following 5 ideas are what I would suggest:

1. Instead of the forced One Child Policy, set up voluntary measures to encourage small families instead. Help to improve education throughout the country even in the rural areas, encourage more people to study advanced subjects at university, to become wealthy, to start towns and cities. Better education and economic improvement naturally lead people to have smaller families, down to replacement level stabilization. Furthermore, this would help China to become wealthier with a better-educated population.

2. Invest in pro-environmental technologies like reforestation, renewable energy sources, enriched crops with nutrients (like the “Golden Rice” that has extra Vitamin A), more energy-efficient technologies that require less electricity to deliver higher output, re-utilization of industrial wastes, vaccines and desalination of seawater. Minimize pollution of water sources and reduce the amount of lead in pipes and homes– which causes intellectual deficits and brain damage in children. The cleaner, less polluted and healthier China is, the more effective the Chinese economy will be. These will help China to have a firm, sustainable industrial economy and help to cushion the effects of rapid economic growth, while increasing health and providing for clean water, air, fruits, vegetables and grains for the population.

3. Provide more incentives for China’s vast population of emigrants in the US, Europe and Australia– including highly educated people who have graduated from top universities– to return home to China and apply their skills to strengthening China’s economy. Many of the “sea turtles” have been returning, but far too few. China has been losing too many of its best-educated and most capable young people abroad, and this, again, discourages us foreign investors from putting money into China. However, if more of these overseas Chinese are lured back in– with e.g. offers for nice jobs with high pay, their own labs and start-up capital for companies– then they’ll boost China’s economy tremendously, boost up creativity, help initiate Nobel Prize-winning work and innovative projects, and other big benefits. This sort of thing further helps to stabilize China’s population in the best way, while maintaining strong economic growth.

4. Encourage educated Westerners– as well as 2nd-generation and 3rd-generation Chinese and other Asian immigrants in the USA, Europe and Australia– to work or even settle in China. Help to spread Chinese language education at Western universities and provide overseas scholarships to talented Westerners to study and work in Chinese schools and companies, especially if they’re familiar with Mandarin. Again, this sort of thing can help to bring in further talent to help solve Chinese ecological and demographic problems more effectively.

5. Finally, and also very important– try to provide incentives and rewards for immigration of skilled workers from elsewhere in Asia to study, train, work, settle and start families in China, and assume Chinese citizenship. In particular, developing countries like Vietnam, the Philippines, Thailand, South Korea, Laos, Cambodia, Indonesia and Burma have an enormous skilled talent pool that likes to go abroad for further education or even immigration, but current Chinese laws bar these skilled people from studying and working in China, where they could be a tremendous resource for the Chinese economy and their own. Vietnamese engineers, Filipino nurses and doctors, Thai businesspeople, Korean scientists, Burmese metalworkers– I’ve met these people and lots would like to work in China, but because of Chinese immigration restrictions, they can’t enter China or gain Chinese citizenship, so they go to Western countries in place of China. This is a tremendous loss of talent and human capital for the Chinese economy, which should instead be attracting such people.

Instead, China should open up its immigration laws to skilled workers from other Asian countries, who could meet shortages in the Chinese economy while getting extra training in Chinese universities and businesses. Obviously, China would also benefit from further encouraging Chinese language acquisition in these countries. In turn, these migrants from elsewhere in Asia would help their home countries by sending remittances back home, while using their extra training and returning home (in some cases) or staying in China and helping to foster business partnerships between China and their home countries.

I’ve read some other ideas like this, e.g. a “responsible family initiative” that’s been floating around, but I think this sort of a proposal helps to both stabilize population and maximize economic growth while protecting the environment, health and nutrition for the people. Again, I’m just a guy with my own partial information set here, but I genuinely admire China and would like the country to succeed– both for the country’s own sake and as a potential market for foreign investment. China could really become a model country, an example of how to grow and develop successfully, and hopefully some of my own suggestions might prove helpful for this.

Posted by: Pete on June 19, 2006 04:47 PM

Sorry to be late to response to this important topic. I tend to think deep and completely before I send out some not-so-solid suggestion. Unfortunately, it needs much more time than posting “travel-helping” information like weather.

Let me do this. I have posted Pete’s question in this entry, so we can start the discussion. I promise when I find more time, one hour, for example, I will get back to this thread to post what I think. (Disclaimer: it is what I think, and it may not be the true, or not a complete picture).

I feel happy that we have so good topics and so involved discussion on this blog. Thanks Pete. I will be back. While I am not involved, I invite everyone to share your perspective on this topic.

Update Tuesday, June 20, 2005

Continues from this entry: One Child Policy in China

Well. I am back home. It is 23:44 Tuesday night, and I think it is the good time to get started to answer this big question.

The Disclaimer (I hate it but I have to)

Before I started, just put the disclaimer here, as I usually did.

This is just a personal blog, and what I am talking here only represents my CURRENT point of view. Not anybody else, not to mention the whole country. I emphasis that it is the current point of view, because any one’s POV may change after he/she is exposed to more data, and has more experience, including me. Also, I am not a consultant, and I don’t want to pretend to know China well. I was born in small city in China, and lived there for 18 years before I moved to Shanghai about 10 years ago. I didn’t see the whole China, even didn’t see enough about Shanghai. I promise I don’t put anything I know is not true on this blog, but I am not saying whatever I believe is true is the truth.

OK. Enough about the disclaim. One problem people in this world have is, by reading newspaper, people claim they know a lot.

Just another off-topic story. My friends told me when he just went to Germany, he only see China appeared on movie or TV station as a poor country. He saw ugly stuff that he never saw in China. He complained why they didn’t introduce city like Shanghai or Beijing or any “good places”. He complained about the lack of completeness of the media there. He complained they didn’t know about China. Later, he finally realized it was him who didn’t see China completely. I always wanted to avoid his mistake when we talk about topics about my country.

One Child Policy

Here is how the one child policy came into being (from the story I heard or read). In the year 1949, China has about 400 – 500 million people. Guided by the theory of “the more people, the stronger we are”, people are encouraged to have as many children as they can. It was of greatest honor to have more children in one’s family in the next 30 years. By the time Deng Xiaoping started to focus more on development of economy instead of population, China is already way ahead affordable people – that is about one billion. So one child policy was introduced.

I have two brothers. I am the youngest one in my family. I was born in Oct in the year of 1977. The One Child Policy came out the same year, about 2 months before I was born, and was enforced in the year 1979 (at least in the place I was born, based on what I heard). So it is not common for people younger than me to have any brothers or sisters.

The Problem One Child Policy Caused

The facts part of many reports are true. (This sentence implies I don’t totally agree on the conclusion part.) The one child policy was enforced from city to villages, and was even violately enforced in some extreme cases.

From what I can feel (again, not what a social expert or economist sees it), it caused at least two problems.

1) Spoiled children.

It is common belief that the generation gap between 1979 and 1980 is much bigger than other gaps (this is just the common point of view in my friend circle of about 100 persons, not necessarily represents the whole country). We guess the reason may be, the generation starting from 1980 don’t have brothers or sisters. They are the only child of a couple, and the only grandchild of two couples. They are treated as “little emperor” inside the family, but fell lonely deep in heart.

I don’t worry about this too much though. Every generation worry about the next generation, with no exception in the last few thousands years. It is how the history works. So I don’t worry about this part. They will figure it out.

2) Old Society Problem.

When the one child policy approaches the third generation (in recent years), people find one child needs to support two parents and 4 grandparents. When they get married, one couple needs to support 4 parents and 8 grandparents. That will cause big problem.

The Recent Change in Policy

In the recent years, big changes have been introduced to the policy. More and more people can have two children. From what I see, it is clear that the policy has almost completed its mission to correct the mistake people made in the last half century and starts to retire.

For example, if both the husband and wife are the only one-child in his family, they can have two children.

I visited the rural area last year, and saw big posters to list about 14 (or some number like this) situations under which people can have two children. I cannot recall all of them. It basically said if it is reasonable to start have two children, people can have two children.

In Shanghai, and many places, the one child policy is not that enforced as before. Previously, the fine for having the second child was twice the annual income of the family (I heard about this but didn’t find any document or regulation about this yet). And the biggest punishment was much more that money. In the old 1980’s, to have the second child practically ruin the future of the couple, and even ruin the future of many related people – like the head of the unit (employer) or the head of the town/village.

Currently, it was not that big a problem. Attempt to find change in regulations or laws will fail, since you can only feel this change, instead of see it.

Government official said they are reviewing the one-child policy and are considering opening it up, but it is a bad idea to open it in one year or two, since it will cause a birth peak that no hospital, school, labor market or government services can handle.

What is MY opinion and What am I Doing

It is always hard to let people understand the *real* situation in China. I know friends from outside China who showed understanding of the policy to some extend (of cause not everyone) after their first visit to China.

Looking back of the history, there are so many mistakes in this country, and we need to solve the problems caused by these mistakes. If you ask me, I share the shame of the country as well as the glory. I am embarrassed to see the mistakes the government made, and is making. That is my opinion.

To say “I hate China” or “I am out of here” is easy for many people, if they are not part of the country. But it is not possible for me. No matter how messy the problems of history left to us as a generation, or how difficult it is to change the current situation, we are the people to solve it, right?

If you are with me long enough on this blog, you will understand I don’t like talking. Sorry I didn’t mentioned news just for sake of news on this blog, unless I can do something on my side. This is what I am doing, to tell history and to setup the bridge for the two worlds (Western and eastern) or even more worlds (every country is a world) to talk. I have no interest or ambition to save the world. I am only interested in and enjoy about helping just one person or two persons. That is good enough for me. Otherwise, I may quit blogging three years ago.

Back to the Investment Question

I think I don’t need to put the disclaimer of “this is not an investment suggestion” stuff here. (Sorry for over reacting, but there is just too high expectation for me to speak as a spokesperson or a journalist)

My immediate answer is, don’t worry about this problem. Yes. I am very sure. “Don’t worry about it”.

China has much bigger problems than this. I would even ignore this if you want me to talk about bigger problems. Wall Streets and New York Times are talking about these problems every week.

We still invest although we know the global warming presents the risk of flooding many cities or even countries, and we keep investing even when we know the oil will be used up within 50 years. When we talk about problems, it is big. However, there are the right people thinking about solutions. I believe human being has survived by overcoming one challenge after the other, and so does a country.

I am not saying One-Child Policy is not a problem. It is. This policy is being abandened. That is the solution.

Suggestions

Pete, thanks for the questions, and suggestions you provided. I don’t have the knowledge to judge whether it is valid or it is impractical in China. What I do know is, the solution part is quite eye-opening for me. I never thought about these solutions or heard about it. For example, opening immigration policy to people in Asia and western world seems very new to me.

China is among very few countries that has continuous history in the last 4000 years. Many problems are much more complicated than people thought. Many problems were caused by mistakes in history (like over-population in 1960’s), but more problems were created by solving those old problems (like one child policy). The solution to solve the problem caused by one-child policy may not be abandoning it immediately. Based on my limited knowledge about sociology, I can imagine what will happen if the birth rate suddenly raises by 500%.

The situation of thousands of problems mixed together is much harder to handle. I am not saying the current solution is the right now. To be honest, I am so embarrassed when the Chinese government was challenged for doing stupid things. At the same time, just because I love the country, and I am part of it, I cannot simply pointing fingers like foreigners do.

P.S. Lessons Learnt in Simulatoin City game

On energy, for example, I learnt something when I was put into the mayor’s position in the Simulation City game. It is a computer game. In it, you are given a piece of land, and 50,000 USD to develop a city. In order to have any resident to live there, you need to have water supply, electricity and roads. There are six types of power station for electricity. The cheapest and relatively powerful one is the coal-based electricity station. It cost 5,000 USD, but it pollute the environment. The cleaner enegry is the nuclear electricity station. It cost 250,000 USD, 5 times more than the money I have.

To get started with the game, you have to build a coal-based station first with the limited money (the other 45,000 need to be used build a lot of other stuff). When people start to live on the land, you can collect tax, and do trading. 20 years after the city was built (in the game), I finally accumulated enough money (about 380,000), and I made the decision to get rid of the two coal-based stations, and built a nuclear station.

In many places in China, it is in similar situation. Everyone knows a much better solution, but that solution has a condition, that people need to get started to build the conditions first. We cannot take it for granted that we have that. If I am not misleading, the history of many countries are similiar. So just give the country mroe patience to solve the problems.

P.S. 1:03 AM now. Didn’t do spelling check or grammer check on this entry yet. I welcome open discussion on this topic, both positive or negative comments are welcome. I am not discouraged when someone correct me and let me know more about this world.

P.S. 2. I started a new entry here to make the entry shorter.

60 Comments

  1. I don’t know where this consultant come from. However, I think he is really lack of data. As a consultant as well, here is some data i know.

    China will be an aging society for sure thanks to the one child policy.the people at age 65 or above will double from 100 million today to 200 in 2025 compared to total 1400 million. This is big. however, remember, the people at age 15-64 will not change a lot which is basically the people you can leverage. below 15, the number is also going to decrease.

    one thing you have to believe is, if one day we think we need more people. then we release a two child policy. :)

    i hope that consultant is not from the same firm i am. :)

  2. Hope it’s not McKenzie that is consulting ChiCom’s ‘population policy’. But if yes, it shouldn’t surprise anybody.

    Probably the largest social engineering campaign since Hitler’s Holocaust, China’s family planning is causing more problems than solution. Above all it is causing moral degradation in an unbelievable scale. Reports are rampant on forced abortion, or even post-delivery infanticides. Chinese communists are committing a murderous crime that amounts to Pol Pot’s genocide, all in the name of ‘population control’. It also serves their long standing policy of pursuing the extinction of Tibetan and East Turks.

    More tragedies will be exposed to the world after the regime collapses. It’s a true tragedy of human arrogance – when government believes it can decide for individuals, disaster does follow.

  3. Pete, you might want to read the analyses from Goldman Sachs and PricewaterhouseCoopers that deal with development of China (& India etc.). Basically, China’s development will slow down in the long run (on a 40-year span), but it’s shouldn’t really be a concern right now. For your current investment, things like your existing experience with China, or existing government support structure/procedures there (all adding to a more secure investment for you) weight much more, I guess…

    Goldman Sachs: “The Path to 2050” (October, 2003)

    http://www.gs.com/insight/research/reports/report6.html

    PricewaterhouseCoopers: “The World in 2050” (March, 2006)

    http://www.pwc.com/extweb/ncpressrelease.nsf/docid/1F07EB32304CF0B08025717000296D2A

    Some useful terms:

    BRIC= Brazil, Russia, India, China

    E7= BRIC + Indonesia, Mexico, Turkey

    G6= France, Germany, Italy, Japan, UK, U.S.

  4. it is noteworthy that the Goldman Sachs report on page 2 projects that by 2050:

    “Individuals in the BRIC countries are still likely to be poorer on the average than individuals in the G6 economies with the exception of Russia.’ p. 2 Goldman Sachs Global Paper No. 99

  5. can anyone offer any reliable figures as to the current number of Muslims in China? Wikipedia states there are as many as 100 million Muslims or more.

    Islam in China

    From Wikipedia, the free encyclopedia

    The Great Mosque of Xi’an, China’s largest mosqueChina is home to a large population of adherents of Islam. Sources, including the BBC, suggest that there may be as many as 20 million Muslims in China, up to 2 percent of the country’s 1.3 billion population. Other sources suggest Muslims in China may number up to 40 million, with new rumors saying there are 10 million more hiding.[1]. Many believe there are over 100 million Muslims in China. This is based on the census undertaken by the Kuomintang in the 1940’s which placed the figure at 45 million. In addition the China year book of 1950 placed the number at 50 million. The figure of 100 million is derived from the population of China doubling since 1950.

    The largest of the ten Muslim ethnic groups in China are the Hui. The other nine, in descending order of size, are Uyghur, Kazakh, Dongxiang, Kirghiz, Salar, Tajik, Uzbek, Bonan, and Tatar. Xinjiang has the largest number of Muslims; many are also concentrated in the Ningxia Hui Autonomous Region.

    A unique feature of some modern Muslims in China is the presence of female imams [2]. A form of Islamic calligraphy, the Sini, has been developed in China. Hajji Noor Deen Mi Guangjiang is a famous modern calligrapher in this tradition.

  6. I don’t see why its a big surprise that the BRIC countries will be poorer than the G6. The per capita GDP of the G6 is streets ahead of those developing countries.

    Will China overtake Japan and the US in terms of GDP – most likely, but with their massive populations this won’t automatically mean a leap in individual wealth – that will take many decades to grow.

    Will the one child policy have an impact on the economy? – only if it remains in place indefinately, but looking at how the Chinese government has engineered their economy, social and democratic emergence of the past 20 years, I really don’t believe they would be foolish enough to keep in place some a long term damaging policy.

  7. Brad

    I didn’t say it’s a ‘surprise’ but noteworthy.

  8. Whoa. Sounds like an American trained by the “religious right” to me, not a potential $10 M investor. How do we know who this Pete guy is? Surely people with $10 M ought to have better informants. “Forced one child policy”? Hah. Plenty of rich families in Shen Zhen had two children just to show off that they could afford to, and that was back in 1998. In Shanghai I think the two-children show-off trend didn’t take hold, at least not in 2005 that I could see. But then all the children are in private schools during the week and you hardly see any of them.

    As for who will be wealthier, well, China is serious about alternative energy development which the U.S. government has ignored. Who’s going to win that race? Duh.

    The U.S. had a two child policy after WWII but it was done by social pressure. Only “lower class” people had lots of kids and no one wanted to be lower class. Suddenly couples from large families had only two kids, and by the 1960s people were criticized for having three and being “selfish.” It wasn’t official policy, but it worked even better than if it had been. The boy-girl ratio is another problem, and the Chinese government is working on a policy for that, I believe. Woe unto them if they don’t.

  9. zjemi

    I don’t know where you are pulling out those figures and statements from but it could not be from an ‘accurate’ play book. it is absolutely false to say that the US had a ‘two child policy’ after WW II.

    I believe it is also ridiculous for you to say that China is serious about alternative energy development with rampant environmental destruction and pollution going on throughout China. Just recently a truck carrying 50 tons of coal tar was driven into one of your rivers. Kiss off another waterway in China.

    one could keep going about what you wrote but suffice it to say that it is not accurate.

    and I never had the impression that Pete was trained by the ‘religious right’. Your mocking of religion is not at all appreciated.

  10. There is great ignorance on the one child policy. The analysis of China collapsing because of demographics is absurd. The USA has worse demographics.

    The age old fear of bigoted people is one race having more children will result in that race overrunning the country. China will not be overrun by muslims or any other ethnicity. This was the same thinking in the 50’s in the USA that with a declining white birth rate that white people would be in the minority it hasnt happened.

    Islam is a religion and not a race so you may see that adherents switch or dont strongly follow the creed.

    Bellevue you really have some social agenda to grind. Have you ever even been to China?

    The one child policy has caused some social issues certainly but lets compare it to India where the population growth is out of control. China is not the only country where girl births are not highly valued. Education will solve this over time.

    The thought that the imbalance of males to females will result in war is also unwarranted. As my buddy suggested it will just result in more men coming out of the closet. Even if there are 40 million more men than females by 2010 that is about 3 % which is probably similiar to other countries. Not a receipe for war. Also China does not live in a vacuum women come to China from Mongolia, Russia etc .

    As was stated the policy has been relaxed. It was never mandatory you could have multiple children if you could afford it.

    You can not impose democratic ideals on a country that for 5000 years has never had democracy. The undeniable fact is things are better than they have been this century and maybe even before. Managing 1.4 billion people is a big job. Its will take decades for China to impact all the people but positive progress is being made.

    Look at the USA in the 1930’s depression, child labor, pollution, racial persecution, low literacy etc It took decades to grow out and educate the population with only less than 25% of the polulation. It will happen with political stability and sustained economic growth.

  11. Actually, many of my foreign friends are keeping on asking me the same questions: Why China has the policy that one couple can only has one kid? It’s really hard for a foreigner to completely understand what’s going on in China.

    The problem is China has a huge population base already, can you imagine the situation that if the government don’t do anything to stop the rising birth rate and just let it be? I believe we can’t affort that much of population. I think there are a lot of reasons that we can’t abolish the policy right now.

    Not all people get well-educated, especially those in the rural places. They even don’t what will be brough to the country if they give birth 3 or 4 times, or ever more.Who to blame? The government or the people? I think either of them. The government is doing their best to make a well-being situation, and the people are tring their best to perform the policy even they don’t understand.

    I knew this policy when I was a little girl who could recognize Chinese characters and read.I accept it because we were taught so since we were little kid, it is a natural thing for our generation and we don’t think it is strange even I know that the kid will be lonely and no one can play with him for his childhood, or even that they will get spoiled by their grandparents.I believe these problems will be resolved by sociologists. And as we can see, Chinese government is doing something right now.

    Let’s go back to your investment in China, I don’t think one child policy should affect your investment. If you want to invest on something, I believe you have been doing your own survey for quite a long time, which country will have a prosperous future, investment on which country can bring you benefit.

  12. If you need a place to repeat ChiCom lies and government brainwash talking points, look no further: blothug wangjianshuo has a perfect place here. Maggie just found it.

    Nothing can justify a government’s decision of infanticide. Chinese government has been doing just that, partly funded by UN program. Shame on the United Nations. Shame on communist thugs and their simpathizers.

    China is full of people like Maggie, who lost the ability of telling right from wrong. Instead they keep recycling the bullsh*t their government made available for them: basically, China needs to kill its baby to prosper.

  13. China’s one-child policy produces enormous amount of ‘unwanted’ baby girls. A portion of them actually survived hospital, which is the state’s killing field, and got abandoned later. A still small proportion of them ended up in American adopting families:

    http://www.msnbc.msn.com/id/5210754/

    If you really have guts to compare India with China, only one society of the two is a humane one, and it’s not China, obviously.

  14. Bellevue, that is just disgraceful. For starters, recent research has proven that the glut of boy babies in China has more to do with hepatitis (which causes fathers to produce boys) than with neglect of girls. Second, China has always had a much more enlightened view about women than does India. In China, women are *expected* to make money and contribute to the nation’s wealth. And women today in China can be very successful indeed. I won’t even begin with the way that women are treated in India. Obviously, China is easing up the controls as it becomes evidence they are no longer as necessary — the primary difference between India and China is that China population is growing in a controlled manner.

    The screed about muslim minorities out-breeding Han is just ridiculous too. Han is the most ethnically consistent and largest population bloc on the planet, and will remain so. I bet that the guy making the alarmist statements came from one of the caucasian races who are currently disappearing from the face of the planet due to low birth rates. Having extra amounts of boys simply means that China will use her new economic power to spread Y chromosomes among the female populations with near-Chinese ethnicity in neighboring states. It is not the Chinese men who should be worried about getting wives, but the men being born in villages in Malaysia, Burma, Thailand and such (and even India). There will be some variance in mitochondrial DNA, but there is really no population on earth without massive variance in moitochondrial DNA — even current Han DNA assimilated mitochondrial DNA from many past races. Han Y chromosomes will sweep the globe in the next 100-200 years; this is how all demographic sweeps happen — this will just be one of the first that doesn’t involve military action.

  15. I don’t see any sign of the alleged easing of tight control in China. As for India, the largest democracy on earth, the family planning is carried out through persuasion and social work, not infanticide and forced abortion.

    Hepatitis in China is a source of ‘legitimate’ discrimination in workplace. Never heard of as a source of boy preference. Can you think of a more plausible excuse?

  16. Every country has its own set of beliefs, laws, ideals, and practices. China has made a conscientious decision to adopt the one child policy for the past 20+ years. Although probably only a few leaders of China had the power to implement this idea, majority of the population have adopted/received this idea as acceptable. At least the majority of the population were not so outraged by this law to cause any major civil upheaval. So it’s really not anyone’s business to object to this policy other than Chinese families. Just like it’s not really anyone else’s business if America decides to gave amnesty to all the 11 million illegal immigrants in America. Unless you believe there is some great common human ideal that every living individual should be held to. But also keep in mind, in third world countries when you don’t have food to eat or a place to sleep and that’s you whole life, you can give a XXXX about those great moral responsibilities…off the topic…

    In terms of investing, there is no reason to not invest in China based on some population demographics due to the one child policy. Who knows what’s going to happen in 2030+. Could you predict that China and India…could get so much press today probably not. When investing, you should look do you really know this area of investment well, what the most probably 5 year payoffs are, and what other alternatives you have to invest in that time span. Make a decision and go with it, life is too short to wait around and mull over decisions.

    By the way I believe only people who have visited/lived in both China and US should comment about how bad each counties policies/practices/ideas are. Otherwise only ask why it is the way it is.

  17. “Every country has its own set of beliefs, laws, ideals, and practices.” Yes, once upon a time the Third Reich decleared Jews and Gypsies (the Romani people) to be ‘cleaned up’ for an Aryan nation. Should I need to live under Hitler’s regime to be able to judge their policy?

    The Third Reich is no more. Yet the similar thinking is still taking hostages.

    India has beautiful, honest, intelligent and hard working people and a democratic heritage you can find nowhere else in the Third World. Investing in India is investing in future.

  18. Hi Bellevue where are u from?

  19. Hint; the same place where the humans and rats share their meals off the same plate, the cattle has more rights then their daughter in-laws, and the only road you can drive on is the one that the Bris have left behind.

  20. BellevueIsAnAss

    June 23, 2006 at 6:37 am

    Bellevue is a worthless Jap.

  21. Really, are you sure? Not a worthless Chink?

  22. Bellevue

    Mother Teresa would have greatly appreciated your comments about India.

  23. Well, my mama is a Jap. I don’t know who my father is.

  24. India is poorer than Cuba. They got serious issues to deal with.

  25. India and Vietnam are corrupt as hell.

  26. Some kids are trying to get some attentions by acting bad. Bellevue was been abandoned by his birth parents and was been kicked around between foster homes. He hasn’t experienced love that much. He can’t fit in anywhere, and any group. He hates himself for not been a real Yankee. He has lots resentments towards his birth parents for all of that. He thinks that’s all their fault. So he calls his birth mother a whore on the Internet hoping she can hear it, because there is nowhere else for him to express his anger. He changes his name around to stage a self-alliance so he can have a party with himself. What a pitiful loser he is!

  27. Ouch!! Buster.

  28. Bad English Buster05

  29. Hi all,

    I don’t read all previous comments so I might just make that very annoying newcomer mistake of repeating something that was already discussed. I have to say, I think China is very serious about alternative energy sources, although I only have experience in the field of cars and other vehicles. The biggest advantages for developing countries like China might be leapfrogging, and I think that might be the case with alternative energy–instead of becoming wholly dependent on gas monsters like America, China is developing hybrid vehicles and has a strong central government to make every average Joe pay extra money to drive around cleaner cars.

    Of course, this doesn’t solve the issue of paying off an official, nor does it really have to do with the one child policy issue. But it does show SOME foresight on the part of the government.

  30. bellevue crap

    June 26, 2006 at 8:47 pm

    i found this page a very interesting one. however, it makes me angry to hear bigots like bellevue speak his/her mind like he knows something – using random pieces of information to support his/her claims. it makes profanity of what we call ‘discussion.’

  31. Unfortunately, China’s crime in name of ‘family planning’ is documented – not very well though – but it’s there. The moral degradation is simply obvious and will leave behind a national wound for years to come.

  32. Bellevue; There are two separated things you are talking about. One is a policy. Another is error of execution.

    Do not mix the two together. How come I did not see you attack on the America’s Justice system when O.J. got away from murder and when Rodney King got beaten up by the LA Cops? The answer lays in the answer to the next question. Who have been feeding Bellevue all these years? Of course, it’s his godfather!

    I also know his response to this post – Bad English. So, save it!

  33. Buster05

    O.J. didn’t get away with murder. Everyone knows he did it.

    the LA Cops went pretty hard on Rodney but he got fame and money out of that shellacking. Bet if a bunch if Chinese cops beat me up, I wouldn’t receive a fraction of what Rodney got in compensation and the Cops wouldn’t be put in prison either.

  34. buster05, it seems that you are willing to concede that China’s practice has been inexcusably wrong. You should go one step closer to admit that its policy per se is misled, to say the least.

    Someone should tell you that O.J. lost the civil case. American judicial system does not fail to serve its ends. China fails on both counts: policy and execution.

  35. Le Duc de Lombard

    June 29, 2006 at 10:57 am

    I must say, this is one of the most fascinating and valuable discussions I’ve seen in a long time. I’m a Canadian (originally Quebecois, French-Canadian– quelqu’un de Quebec ou de France, bienvenue mes amis!). I’m also deeply involved in the international finance sector, and indeed, we Canadian investors have also been talking *a lot* about this One Child Policy topic. We have ultimately decided to continue our investments in China (which are tens of millions of dollars). While I am an admitted Sinophile myself as are my colleagues, we have decided on our investments for strict *business* reasons, not sentimental ones. We are still very confident in the Chinese economy.

    Pete, thank you so much for your excellent contributions. There are two points in your posts that I wanted to focus on.

    First, as a retailer, your concerns about demographics in China are valid. If the OCP were applied too overzealously, it wouldn’t take 4 decades (the third generation) for unpleasant effects to come about, this would happen much sooner, perhaps within one decade when there would be too many elderly without adequate social and financial support.

    HOWEVER, there’s one crucial detail that the investment consultant may have left out when he spoke to you– the Chinese government never intended the One Child Policy as a permanent policy, it was only supposed to be something that would last one generation and then be discontinued, and as Jian Shuo Wang is writing, this indeed seems to be happening. IOW, One Child Policy was merely a corrective to a demographic situation that may have over-strained China’s environment, since e.g. Mao and even the Nationalists before him were unusually pro-Natalist, and China also had a massive “demographic bump” following the Sino-Japanese War and the Civil War. For all their flaws in many ways, the Chinese officials are very smart people– China has a much higher level of trained scientific professionals in government than the US or most European countries. This is one of the reasons that I think over the long term, China will exceed the US, since its political system– and I’m assuming it will indeed gradually evolve– constantly tends to attract analytical, disciplined professionals rather than the yahoos who rule the US.

  36. Le Duc de Lombard

    June 29, 2006 at 11:14 am

    Oops, I forgot my second point! There’s a very unique idea you mentioned in your post, Pete, which I found to be brilliant, and I hope that the Chinese authorities are listening because this is the key to China advancing economically and scientifically– China really should carefully, methodically open up its doors to work and residency permits for a controlled number of ***SKILLED IMMIGRANTS***, especially from other East Asian countries such as Vietnam, the Philippines and Thailand but also from the West. The keyword here is *skilled*, not unskilled. It’s the advantage in attracting skilled workers, that has enabled Europe and the US to continue to grow economically even as they suffer from their own worsening social problems at home.

    My uncle’s home country of France, for example, is rapidly becoming a world intellectual center again– along with Germany– since France has recently been modifying its laws to selectively allow in skilled immigrants and computer workers from countries such as the Philippines, India, Vietnam (a former French colony), South Korea, Brazil, Romania, Bulgaria and Russia. Business owners, scientists, and other creative and productive people are also offered incentives to come to France, or to Germany. As a result, these two countries are turning their economies around and growing again.

    China can help itself in a similar way and even begin to lead in industries like computer software (or create new industries entirely), by becoming a magnet for skilled immigrants, technical workers, scientists, artists and creative people from other countries, especially others in East Asia that share cultural ties with China. For example, the Philippines is a potential wonderful source of skilled workers for China, and could help to build valuable ties with the Chinese economy. The Philippines has millions of skilled nurses, doctors, engineers, entrepreneurs, artists and architects who would love to work in China and build up trans-national ties with China (facilitated by geographical proximity). Similar situation for Vietnam, and for South Korea, Thailand and Laos.

    To build up its economy from the inside, China will need at least a share of the best talent from the outside, and offering incentives for skilled, creative and entrepreneurial workers from nearby Asian countries to immigrate to China is one excellent way to do that. As such talent is imported, Chinese industries will take off. They should also help to attract additional talent among the overseas Chinese diaspora, as Pete was suggesting.

  37. Le Duc de Lombard

    June 29, 2006 at 11:24 am

    One more thing to add– interest in study of Chinese really *is* increasing fast. France will soon be requiring Chinese language learning (including the writing as well as the Romanized pinyin) in many French schools, with many private schools following suit. Same for much of the rest of Europe. Many Americans are also starting to study Chinese, though the growth of Mandarin study in the US has been slowed since people in the US have to know Spanish so well.

    BTW Pete, many myths about the One Child Policy have indeed been debunked publically. In fact, even Chinese demographers themselves admit they don’t know what the actual population of China is, but official figures are a big underestimate, especially of the number of girls. Some Harvard Medical School student had a pretty good myths/facts page on the One Child Policy myths a while ago, I’ll try to find it again. In any case, people find all kinds of ways to break the policy– sending kids to relatives, moving at the time of the census, bribing officials, paying the fine (as a way to flaunt wealth, in having 2, 3, even 4 kids– this is indeed common), joining the military and so on.

    The Harvard Med guy also pointed out something about how vaccine companies in China always overorder vaccines for villages by 25% more vaccine doses than would be needed by official estimates– and use up almost every single dose, clearly showing that the official figures really *do* underestimate Chinese births by 25% or more in the villages. (The vaccine companies after all, really *do* have to get the numbers right.) So in other words, China’s true birth rate, the total fertility rate for the country, is probably closer to 2.1, maybe 2.2 rather than 1.6. The slowing of fertility in China started well before the OCP and has been moving in the expected trendline. This is backed up by the evidence, so indeed, China really has been gradually modulating population growth, we in the West often just miss the details.

  38. Shreks; You have a lousy reasoning ability.

    Let me show you the thread of the argument;

    Policy – Execution,

    Law – Enforcement

    Where were you?

    BTW, where is O.J. now? He plays golf by the day, party by the night. And he still beats his girl friends. You call it justice is been served? If O.J. worked at Burger King with minimum wage, you wouldn’t think he could be walking on the streets today, would you? Again, King got paid only after half of the LA burned down. Who were paying for those damages? Based on your argument, it is a better system that you can pay someone so you can beat him up then a system that an official can take a pregnant women with her 2nd or 3d child to an abortion clinic.

  39. Although Pete raises many issues that are surely true (and you seem to confirm his statements, Wangjianshuo) I have very, very serious doubts as to this fellow’s authenticity as an investor in China. He has made some ridiculous comments based on very limited information, AND in addition, if he is investing in a 2025 timeframe, I cannot imagine what business he is in. The time to take advantage of China’s position is now, not expecting it to all end nearly twenty years from now. Absurd.

  40. ladies and gentlemen, i saw your entries re: environmental policies and China’s desire to pursue new ground in that area. while that may be true, there are many foreign investors who do not share their interest. allowed to build on hallowed grounds, level villages and pollute as they wish, perhaps the truck bearing coal tar was not Chinese……..

  41. I don’t think one child policy will have great impact on the economy in China. Because it is booming population that really do harm to the whole society.If China can reduce its population we can have more opportunities to live better and be more productive.

  42. concernedchinesefriend

    December 26, 2006 at 12:58 pm

    chinas one child policy wont cause an economy crash, reversing it will be a bigger problem plus…white people just want china to fail by making useless demands..what will happen to economies of places like canada where people no longer value children or europe—go on china and dont let them white devils confuse you they can keep their money..and china will still rise,,,,atleast people in china still marry and give birth to one child ….what about europe ,canada ,,let what will be… be

  43. Fascinating article on the economics of chinese birth planning : in depth analysis with useful facts and statistics.

  44. please go on about the OCP being supported/funded by the UN. I never knew about that aspect of the one child policy.

  45. Why isn’t there anybody supporting the birth control policy? I am. Because the huge population has caused too many problems.

  46. they shouldent tell people how many kids they want to have THATS JUST WRONG

  47. they shouldent tell people how many kids they want to have THATS JUST WRONG

    they can suck a dick

  48. saw your entries re: environmental policies and China’s desire to pursue new ground in that area. while that may be true, there are many foreign investors who do not share their interest. allowed to build on hallowed grounds, level villages and pollute as they wish, perhaps the truck bearing coal tar was not Chinese…….

    maybe not, but it is allowed to operate in China with impunity as long as the local officials and/or their relatives can have a new Audi.

  49. Well i have been learning this & i need to do a prodject on it. it was the population in china there was just to many people in china so they thought it would decrease if they told every couple in china that they can only have one child but why wel they thought the population would go down and it did but years on they still have that law evan in 2008 but they have put it up 2 twp children now so thats how in started

  50. People should support the 1 child policy because over population can cause a terrible out-come

  51. People should support the 1 child policy because over population can cause a terrible out-come

  52. china can lick some balls,lick a nutsack,and suck a dick

  53. wow, belluve, i feel for you, im the same way (no parents, foster care) im only doing a project on This ONE-CHILD POLICY and i dont believe in it, but when head comes to tails, it seems i was forced to debate for it.

    Any good ideas that i could shoot back in a heated debate on wheteher it should or shouldnt be allowed?

    i would like to see some Pro one child policy comments, it would help me a ton

    oh and im only 16 so dont make fun of my english, thanks.

  54. ‘pete’ should invest in his own education. Lacks credibility and is obviously a bogus post from an impoverishered noodle eating student somewhere in a net bar

  55. does anyone know any websites i could get more detailed info on china’s one-child policy? and has this policy been succesful in china?

  56. plz could you tell me why they introduced the one child policy.

    i no that the popluation was exploding and threat of famine but are there any other reasons??

  57. The one child policy is all about abortion, sterilization and and also “adoption rings”,where babies are being produced and sold very specifically all over. (especially China)

    Ironically, even in China, these agencies don’t seem to implement the “one child” policy here!

    Young women are immediately told to abort or adopt out.so both options make a lot of cash off women by taking a child, dead or alive .

    ..This policy has been in the works for years, to be implemented all over the world ,carried out in systemic ways,as a guise, as safe planned parenting, having more than just control on Educating the young but over their bodies!

    This is what “choice” groups helped to implement, not realizing the devil they were working for or how they have been conned

    People will wake up one day soon to the horror, when the feds coming knocking at their door, demanding their child too..

    That is how we have been so blind.

    Planned Parenthood is all about the Systems plans…not parents plans!

    Better have children now, and Educate them for what is coming or we will be ruled by a generation of the Systems “chosen” ones.

    (creepy)

  58. i feel bad for china

  59. i think it should not be a limit on how many children you can have…i feel bad for the families in china and im praying that god give them strenght to deal with the policy…god bless

  60. THANK YOU SOOO MUCH FOR MAKING THIS BLOG!!!! I NOW WORSHIP YOU!!! I HAVE A ONE CHILD POLICY REPORT DUE TOMORROW AND YOU HAVE JUST GIVEN ME EVERYTHING I NEED!!! (haha suka u just did my homework! lol)

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