Will it help the economy?
Many scholars in China believe that the old Chinese one child policy, which came into force in the late 70’s, has perhaps, harmed China. Though, it certainly helped China check the then fast growing population, but now experts believe that things have changed. The economic scenario and the economic fundamentals have changed. How will the change back the Chinese economy?
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It was in the late 70s and early 80s when foreign investments began to flood China. The reason was cheap labour and also the low regulatory working standards, which made things less complicated. Chinese economy began to see a surge never seen before, with its exports soaring to trillions. There were all kinds of electronic items, and many other products, which started getting manufactured at a remarkably low cost.
Now the scenario is changing. The availability of the huge number of workers has declined. Chinese authorities have been forced to come to the conclusion that they now have to go away from the old set up of one child policy.
The real question, however, is why do suddenly there is so much scarcity in the labour market?
The most crucial factor that China faces now is the change in attitude of their young people. In the early 80s, almost the majority of workers belonged to the uneducated class, and that made it easier for companies to hire such folks. However, the modern young people in China are different, they don’t love going to factories in their teens. They rather prefer to read and get an education because their dreams are different from the people who worked in the 80’s.
Moreover, china has been facing the problems of an aging population. The age group of the working population has declined significantly. Young people have become more ambitious and shun the life of a factory worker. They believe in education, and, they have parents who can help them study and live a healthy lifestyle.
As the problems don’t seem to die down, China feels that the scrapping of one child policy will turn the tide in their favour. In time, it will bring more young people in the labour market. The likely increase of the population will also have a bearing in the baby food and toy market, and other baby product market. Let the time fly, and we will all know what this new policy will do for China.
By Rajiv Sighamony