Oxstones Investment Club™One of the first announcements by the new administration taking charge in China this month was that the one child policy, which has been in effect since 1979, will be phased out. The end of this most repulsive of social policies is good news for human rights in China, but it seems to be motivated not on humanitarian grounds, but rather, because it has saddled China with unintended consequences that will weigh heavily on that nation for decades.
The policy was originally justified as necessary because of excess population and to promote economic development. Much has been written and can be found on the Internet about this policy and the current and long-term effects it is having and will have on China. The reluctance by China’s central government to abandon the one child policy is not out of a failure to recognize its shortcomings. Rather, it is because the policy has been highly successful in achieving a principal objective, a unification of the public in support of an unelected, autocratic central government.
Let us go back in history:
In the 1800’s China and Japan were similar in terms of per capita income and in an emperor dominated form of government. The principal social difference was that Japan had primogeniture laws pertaining to inheritance and China did not. Hence, in Japan, when a wealthy man died, the eldest son inherited all, generally land, and the younger siblings, who were equally educated, tended to migrate to the cities and transferred their allegiance to the emperor rather than their families. They became an educated middle class who made the industrial revolution happen in Japan.
In China, property was divided among siblings when the father died. This made the extended family the center of loyalties and undermined identity with the nation or the emperor. The fact that the Chinese emperors discouraged industrialization, along with the constant division of wealth, only added to China’s lagging performance.
When the Mao Communist government took power, they saw a need to break down family allegiance to reinforce loyalty to the central government. They could not do this by changing inheritance laws since communism had extinguished property rights. Through a one child policy the government broke down family units over time by shrinking the extended family to one consisting of a son or daughter with parents and grandparents. Without siblings, only more distant cousins, a few uncles and aunts constituted the extended family. The family, rather than being the source of financial support and a basis for entrepreneurial support, are now a burden to support in their old age. This leads inexorably to weaker family ties and a stronger allegiance to the government.
The one child policy has disrupted Chinese society both socially and economically. On the social front, you have two generations of Chinese adults who never had the benefits of growing up in the competitive environment of siblings. In fact, they likely grew up in a pampered environment that tends to create a society of self-centered people.
In the case of females, of which there is a great shortage versus males (a huge problem in its own right), this manifests itself in women preferring working to homemaking. They are in no hurry to give up their independence or raise children just because they now can. A public opinion survey in China of young couples finds that most think one child is all they really desire. Another survey notes that two thirds of college graduates seek a job in government or a government owned entity. This, in a country where entrepreneurial opportunities abound. The reasons given amount to a need for the sense of security they grew up with.
On the economic front, the total Chinese population over 65 is rising, percentage wise, at one of the fastest rates in the world. This is a tremendous drag on economic growth in most of the industrial world, but may prove to be even worse for China despite the lack of an expensive network of health care and pensions for the elderly. After all, a government that does not take care of its elderly cannot expect strong support or stability even were it not autocratic.
Those who think China is destined to be the world economic leader in the not too distant future need look no further than Japan in the 1980s to see that momentum cannot overcome structural flaws. The factors working against China’s future are demographic and overwhelming, but they are also self-inflicted wounds. And, like our own problems, they were motivated by political expediency rather than concern for the public good.
China’s future is still bright, but the newly installed government faces some huge problems that will not be remedied with a centralized, command and control form of government. The main question will be, how tumultuous will things have to get before the leadership decentralizes the decision making process and liberates the political process.
http://www.forbes.com/sites/investor/2013/03/28/why-china-is-finally-abandoning-its-one-child-policy/
Tags: aging population, Change, China, China communism, China demographics, China economy, China social policy, Chinese society, Future perspectives, government power, Japan, Mao communist government, One-child policy, property in China, woman independence