China, birth rate and push for more consumerism

[lac]

Was just listening to CNBC talking about this policy change and the talking heads are saying this will help increase consumerism.

I wish there wasn't such an emphasis on getting people to buy more stuff that they don't need. It will be interesting to see what the popular vote is on how many people take advantage of the policy and how many will say one is enough.

http://www.washingtonpost.com/world/asia_pacific/state-media-china-will-loosen-1-child-policy-abolish-labor-camp-system/2013/11/15/a1c2122a-4de6-11e3-97f6-ed8e3053083b_story.html

[lhamo]

The bigger issue, as noted in the article, is the extreme pressures China will face as its population ages. If you think the US social security system is a mess, try dealing with a population where the typical demographic pyramid is inverted and the bulk of the population is above retirement age. Which in China is ridiculously low, by the way -- women are often forced to retire at 50 and men at 55, a holdover from the planned economy days.

Most urban families will likely choose to still have only one child. My husband has four younger sisters who each COULD have had two children (they are ethnic minorities so the rules are different). None did -- they all stopped at one, even the three who had girls. They do see our family structure as ideal (we have one boy, one girl, with the eldest a boy -- popular opinion expressed every time I tell someone that in China is that this is the PERFECT family), but with the cost of raising, schooling and marrying off a child rising all the time none of them were eager to take on the responsibility of an extra mouth.

The Chinese government is currently emphasizing consumer consumption as a path to further growth, unfortunately. They have to, as China is already hitting the point in its development where a low-overhead, export-oriented economy is not going to be able to maintain growth, and most likely is going to retract as costs here drive the cost of manufacturing above what it is in other places.

But the concern about the environmental effects of the current path are serious and real, and China does need to get a handle on that aspect of things. The one blessing of living in a totalitarian state is that when the government sets its mind to doing something, they can do it and do it big. The development of the railway infrastructure in the past 5 years is an incredible example. Although there have been lots of problems with corruption and mismanagement, China now has one of the world's most impressive high speed rail systems. I took my first ride last week -- amazing experience. Speeding through the countryside at 300km an hour. If/when the Chinese leadership sets their minds to something, they can do it quickly and big.