Here comes the baby lift to China’s economy
Talk about baby power …
The new two-child policy China plans to adopt is expected to boost the country’s economic growth rate by about 0.5 of a percentage point, a senior Chinese official said Tuesday.
Wang Pei’an, vice minister of the National Health and Family Planning Commission, said the boost would come from an increased work force, but didn’t specify any time period.
“In the long-term, the positive effect on economic growth will be significant,” Wang told a news briefing, according to Reuters.
This would lend credibility to President Xi Jinping’s pronouncement last week saying it’s possible for the country to have annual economic growth of around 7% over the next five years.
It’s been nearly two weeks since the ruling Chinese Communist Party took the dramatic step of ending its long-standing and controversial “one-child policy.” But critics say the policy change comes too late and will not have the desired effect.
Adoption of a two-child policy will boost consumer demand for housing, education and health and daily necessities, and increase employment in the short term, Wang said according to Reuters.
The one-child policy went into effect in the late 1970s to prevent population growth from spiraling out of control. The policy is not just considered outdated, the is blamed for China’s shrinking labor pool, which is a problem as the population ages.
In the next 30 years about a third of the Chinese population is expected to be older than 60 and there will be a lot fewer working adults able to support them.
The new policy, should boost the labor force by more than 30 million and reduce the aging population by two percentage points by 2050, Wang said.
“The implementation of a comprehensive two-child policy will help to improve the population structure and promote the balanced development of the population,” Wang said.