Termination Of China's "One Child" Policy... Much Ado About Next To Nothing

Authored by Chris Hamilton via Econimica blog,

In late 2015, the Chinese government formally changed its 3+ decade "one child" policy to allow married couples in China to have two children.  The Chinese government and many pundits anticipated a subsequent "baby boom".

This policy change came after the Chinese child bearing population (those aged 15-40, which peaked in 2005 at 580 million) had already declined by over 80 million (a 16% decline).  Regardless the impact of the change in policy, China's child bearing population will fall another 15% over the next 15 years before any possible uptick from the policy change could begin to show up in the child bearing cohort.

The chart below shows annual change in million persons (red line) and total child bearing population (blue columns).  From 2018 through 2033, China (with net emigration, to boot) will see an average annual decline of nearly 6 million Chinese capable of creating more Chinese (or the equivalent of losing the population of a Missouri, Wisconsin, or Maryland every year for at least the next decade and a half).

The government stated it expected the lifting of the "one child" policy to increase births above and beyond the existing 2015 births (16.56 million in 2015) by 3 million per year and this would carry on for at least 5 years.  This would represent an 18% annual increase from the 2015 basis.  Talk about pent up demand.

First, a look at China's births since 1950...the columns in the chart below show total births per five year periods and the average births per those periods is highlighted in the boxes.  From 2000 to 2005, total births were essentially half of the peak period from 1965 to 1970.  However, a small uptick since births bottomed is visible from 2010 to 2015.  Also included is the UN high, medium, and low estimates through 2035.

So without further ado, we now have two years worth of results available (HERE), let's take a look: 

2015 - 16.55 million births
2016 - 17.86 (+1.31 million...+7.9%)
2017 - 17.23 (+0.68 million...+3.5%)

Again, China anticipated removing this governmentally imposed restriction would be a "game changer" and produce somewhere around 19.5 million births annually.  Instead it looks like the air is already out of the balloon but this should not have been a surprise as according to China's own family planning commission's survey of existing families, 75% said they were unwilling to have a second child because of "economic reasons".  I would expect most of those who were restricted and wanted multiple children have already gotten the deed done or will do so in 2018.  As of 2019, I'd expect to see births back in the 2015 neighborhood and continuing down from there as the fast declining child bearing population and "economic reasons" only push births lower, as the UN medium to low variants anticipate.

This seems to indicate the collapse of China's working age population (chart below, those aged 16-60 years old) already underway will continue to accelerate indefinitely.  Over just the next decade, China will see an average of seven million fewer potential workers every year, seven million fewer potential home buyers, seven million fewer potential car buyers.

And China, (like Japan, Germany, and so much of the "developed world" in the midst of an accelerating collapse in working age population), is being overwhelmed by an onslaught of geriatrics (chart below).

As noted previously (HERE), something has to and will give as the chart above is simply nonviable.  Here's the punchline... China's plan since 2008 has been and still is to effectively force Chinese corporations to take trillions in credit to build massive new capacity, housing, infrastructure, etc to promote"growth" (much if not most of it unprofitable and ultimately unable to service the debt).  All this build out for a fast declining and depopulating consumer base that will only progressively consume less leaving all the malinvestment high and dry.

Comments

Occident Mortal Troy Ounce Fri, 02/16/2018 - 05:34 Permalink

Here's the punchline... China's plan since 2008 has been and still is to effectively force Chinese corporations to take trillions in credit to build massive new capacity, housing, infrastructure, etc to promote"growth" (much if not most of it unprofitable and ultimately unable to service the debt).  All this build out for a fast declining and depopulating consumer base that will only progressively consume less leaving all the malinvestment high and dry.

 

They don't give a shit about the debt. Once all the stuff is built it isn't going to disappear. They can just cancel the debt, burn down their (temporary capitalist) monetary system and resurrect a clean slate. Who is gonna stop them?

 

In reply to by Troy Ounce

GUS100CORRINA DownWithYogaPants Fri, 02/16/2018 - 08:46 Permalink

Termination Of China's "One Child" Policy... Much Ado About Next To Nothing

My response: CHINA is up a creek without a paddle and this will TAKE DECADES to FIX. GOOD LUCK CHINA on your new found truth after having slaughtered 10's of millions of your own citizens in the womb!!!! 

And GOD said ...

Genesis 1:28 
And God blessed them, and God said unto them, Be fruitful, and multiply, and replenish the earth, and subdue it: and have dominion over the fish of the sea, and over the fowl of the air, and over every living thing that moveth upon the earth.

In reply to by DownWithYogaPants

Enrabard GUS100CORRINA Fri, 02/16/2018 - 09:28 Permalink

It lost it's relevance since God is dead and human population grown in number so much it's killing it's own habitat. Old rules fitted old world. Old God fitted old men. Nietsche was the only one to see the real future and show a way for human to reborn (and by that also for God to be ressurected). If you don't see the whole point God died you don't see nothing, only empty words. The Word is in soul and mind not in any pieces of paper.   

In reply to by GUS100CORRINA

Donald J. Trump DownWithYogaPants Fri, 02/16/2018 - 10:17 Permalink

China will go the same way as all Western Countres have.  Increase the standard of living until it is no longer sustainable and then decide on fewer children as they are not sure they can provide the standard of living.  Many years ago children were made to help out the family in life.  Same in China.  There was a village to run, fields to farm etc.  Babies would become a good investment.  Not anymore.

China will end up importing brown people as they don't give a shit abount economics or standards of living, but are happy that their new home is better than their last.  Until they fuck up their new home.

In reply to by DownWithYogaPants

Enrabard Occident Mortal Fri, 02/16/2018 - 09:23 Permalink

It's impossible to make such revolution without crashing economy. Much of this is malinvestment and you have ghost cities where buildings stand empy for decades becomming ruins in time since there is no work so people won't ever live there. The same with economy structure. They produce for export and industry has great capacity to produce stuff for other countries only without any possibility to sell it at home. If they stop paying debt you loose credibility, you loose capital needed for investment, all foreign one escapes, that one at home would shrinks rapidly because all debt would be revaluated and written off from balances... Then you can print as much you want but inflation would hit the next day not being prolonged in time like now by investments which must have any sense to happen in economic terms.  

Karma always comes back. So they will stop themselves then... and the next day Chinese people would hit the streets... It's not Japan... Material stuff and factories without consumers are worth zero.

Only this demographic factor alone makes lots of investments in housing completely insane. Chinese aren't smarter than anybody else - they also make mistakes and don't read always the right charts or live dreams. 

In reply to by Occident Mortal

Endgame Napoleon Troy Ounce Fri, 02/16/2018 - 09:19 Permalink

Have sex and reproduce, China! According to US economists, this is the key factor for economic growth, even though the US population was much lower at our economic peak, when we had a widespread middle class, and even though China achieved a lot of growth during the years of its one-child policy. The US goverment pays the major household bills of womb-productive citizens and noncitizens, also providing thousands in monthly cash assistance and child-tax-credit welfare, which is also cash-assistance welfare—all to spur economic growth. Our goverment has been doing it for decades, as our middle class faded into the rearview mirror, proving that economists are right: sex and reproduction stimulates economic growth.

In reply to by Troy Ounce

roddy6667 Fri, 02/16/2018 - 03:11 Permalink

All this talk about how China and Japan are in the middle of a serious decline from demographics. However, their economies and societies are doing much better than America. Do Americans write these articles to keep themselves from being depressed about their country going rapidly down the drain?

mkkby roddy6667 Fri, 02/16/2018 - 15:32 Permalink

China has big problems with pollution and over crowding.  Who wants more kids when you need a gas mask to walk across the street?  Or when herds of dead pigs float down rivers?

It's even worse in India.  Floating turds and rotting corpses in the same water they bathe/drink.

Lots of big problems need to be solved before people will want kids.

In reply to by roddy6667

petroglyph Fri, 02/16/2018 - 03:40 Permalink

I've long wondered how old people will fare in China, with only one child to help. I don't think the retirement system is even as good as ours? A lot of the food isn't good, and the elderly are going to have old people diseases, obesity not being one of them. Sucks getting old anywhere, but it's nicer if you are fed, warm and dry with some health care, besides dried elk horn.

Herp and Derp petroglyph Fri, 02/16/2018 - 04:18 Permalink

Filial piety is not just a philosophy, it is also the law.  You must provide for your parents and spend time with them.  They can sue for support if necessary and embarrass the shit out of you in newspapers.  It is yet another concept that prevents the Chinese from being pure communist.  It goes both ways for the family unit as older relatives qualify for better apartments and support that their kids can lean on.

In reply to by petroglyph

roddy6667 petroglyph Fri, 02/16/2018 - 05:42 Permalink

China is set up better to deal with old people than America. Most old people live at home with their families, not in a $50,000 a year facility. Nursing care is brought in. When old people lie down to die, they don't call 911 and have a hospital put them on life support for another 60 days or so. Also, people have money in China. The average person saves 36% of his pay. First class health care is available at hospitals for about the same cost as the deductible on Medicare. I retired in China, and I spent a few years looking at the options. America's system of dealing with the elderly is terribly expensive. It only serves to transfer all of a family's net worth to the health care system in the last 60 days of the person's life. That's great for doctors and hospitals and nursing homes. Bad for everybody else. 

You know nothing about the subject. Please stop commenting.

In reply to by petroglyph

delmar Jackson petroglyph Fri, 02/16/2018 - 11:09 Permalink

my mom had 6 kids. I was the one who went to the home for 3 years as she died from Alzheimers, the other siblings were dead, working or ill themselves. The kicker is I almost never saw any other old people have visitors except on Sundays or holidays. and even then.... as far as elk horn goes, it probably works as good as the three medications my mon took for Alzheimers that wiped out her savings and didn't do anything to stop the disease. The Chinese with one kid will not be any worse off than the USA with 2 or 3 kids that never visit and our western medicine and doctors is the 3rd leading cause of death. Buckle up, getting old is not for pussies no matter where you live.

In reply to by petroglyph

The_merovingian Fri, 02/16/2018 - 03:45 Permalink

All the Buildings, the infrastructure, the manufacturing capability and the gold they’ve amassed on their limitless credit card will still be there if SHTF. The debt is in Renminbi, all it takes is for the PBoC to press the delete button on their central computer and the problem is solved. Worst case is they will have to pay for food and raw material imports with gold for a while.

BritBob Fri, 02/16/2018 - 04:52 Permalink

Xi has his own agenda.

China – Argentina – the Falklands

In tune with Macri's words, Xi Jinping thanked Argentina "the support they have given us for our claim of a single China as we support theirs for the Falkland Islands."  (Telam 17 May 2017)

How would a map of the world look today if all of the territory lost and gained over the past 180 years reverted to its 19th century status? Quite a ridiculous proposal.

Falklands – Acquisitive Prescription(1 pg): https://www.academia.edu/35552595/Falklands_-Acquisitive_Prescription

SmittyinLA Fri, 02/16/2018 - 05:32 Permalink

It's too late, Chinese women have been corrupted like Western women, they're all worthless money grubbing tramps unworthy of marriage or children.

China's only hope is to kill all state pension benefits, ya it will burn all the women that didn't have kids, but they already aborted their futures anyway, no use crying over spilled milk.

not-me---it-wa… Fri, 02/16/2018 - 06:23 Permalink

thing is, the "one-child policy" was never that.

there were too many exemptions, in all the

wrong places.

 

for members of one of china's 58 recognized ethnic

minorities, then no limits.  poor peasants and farmers

could have more than one.  (with many born outside

of hospitals, hard to keep accurate count anyway.)

 

the only people truly affected?  the middle class.

doctors, lawyers, professors, bank managers.

educated folk were limited to one child. 

peasants and china's version of dindus.....multiple.

 

one other exception was for the very rich who could afford

the fines and suitably fill the red envelopes for kids who

would be sent out of the country for education anyway.

 

 

yerfej Fri, 02/16/2018 - 08:15 Permalink

Meanwhile is there anyone left on the planet who is focused on enjoying life while here? Seems like everyone is working hard planning destruction and the conquering of others while the days pass. This is a disease that inflicts most humans minds and it tough to understand outside of the fact that many are miserable and they don't want to be like they are alone. Complete phyucking global retardism.