Birth pol­icy change key to econ­omy

China Daily (Hong Kong) - - BUSINESS VIEWS - MIKE BASTIN The au­thor is a vis­it­ing pro­fes­sor at the Univer­sity of In­ter­na­tional Busi­ness and Eco­nom­ics in Bei­jing and a se­nior lec­turer on mar­ket­ing at Southamp­ton So­lent Univer­sity’s School of Busi­ness. The views do not nec­es­sar­ily re­flect those of Chi

The re­cent an­nounce­ment of a slight re­lax­ation in China’s one-child pol­icy is cer­tainly the most sig­nif­i­cant change since the pol­icy was in­tro­duced more than three decades ago.

The shift will mainly af­fect ur­ban dwellers, where a cou­ple will soon be al­lowed to have a sec­ond child if ei­ther par­ent is an only child.

Pre­vi­ously, both par­ents had to be from one-child fam­i­lies.

Many ex­pect a sub­stan­tial in­crease in births as a re­sult, with es­ti­mates of be­tween 15 and 20 mil­lion peo­ple be­com­ing el­i­gi­ble to have two chil­dren.

Early indi­ca­tions are that ap­prox­i­mately 50 to 60 per­cent of th­ese peo­ple are ea­ger to take ad­van­tage of this new op­por­tu­nity.

In­creased so­ci­etal and fam­ily har­mony and to­geth­er­ness are of­ten cited as key rea­sons be­hind this an­nounce­ment, but another key fac­tor is the im­bal­anced la­bor mar­ket.

The tra­di­tional pref­er­ence for a male birth, com­bined with the one-child pol­icy, has led to the world’s most skewed gen­der ra­tio at birth.

Last year, ac­cord­ing to of­fi­cial sources, the ra­tio was 117.7 boys for ev­ery 100 girls. In com­par­i­son, the ma­jor­ity of so­ci­eties do not ex­ceed a ra­tio of 107 to 100.

As a re­sult, there may be up to 25.4 mil­lion more males in the un­der-15 co­hort and pos­si­bly 51.5 mil­lion over­all across main­land China.

The re­cent an­nounce­ment should lead to some sort of re­duc­tion in this dan­ger­ously un­bal­anced ra­tio, es­pe­cially if a Chi­nese cou­ple’s first child is a girl.

The nat­u­ral pref­er­ence for boys, largely be­cause of the male con­tin­u­ing the fam­ily name, and a mixed gen­der co­hort should, there­fore, lead to more cou­ples try­ing for a sec­ond child if their first is fe­male. But the chances of this sec­ond child turn­ing out to be fe­male are also high.

China’s la­bor mar­ket, there­fore,

Chi­nese com­pa­nies need far more fe­male man­agers and lead­ers, and this slight shift in the one-child pol­icy should help in this di­rec­tion. MIKE BASTIN AT THE UNIVER­SITY OF IN­TER­NA­TIONAL BUSI­NESS AND ECO­NOM­ICS

should be­come more evenly bal­anced be­tween males and fe­males, which can only be a good thing. Chi­nese busi­nesses, more specif­i­cally the man­agers of th­ese busi­nesses, re­main mostly male-dom­i­nated.

Many are of the view that this con­trib­utes con­sid­er­ably to an overly au­to­cratic, con­ser­va­tive busi­ness cul­ture where there is lit­tle or no op­por­tu­nity for team­work and in­no­va­tion. Yet stud­ies done across cul­tures and over many years sug­gest strongly that fe­male man­agers and lead­ers usu­ally cre­ate a more pro­gres­sive, con­sen­sual, less ag­gres­sive and more tol­er­ant, flex­i­ble and open busi­ness cul­ture, seen by many as far more suit­able for the cur­rent and fu­ture busi­ness en­vi­ron­ment.

Chi­nese com­pa­nies need far more fe­male man­agers and lead­ers, and this slight shift in the one-child pol­icy should help in this di­rec­tion.

China’s ag­ing pop­u­la­tion also rep­re­sents another wor­ry­ing de­mo­graphic trend. Of­fi­cial sources re­veal that the av­er­age life ex­pectancy in China rose to 74.83 in 2010, a level 3.43 years higher than just a decade ear­lier. By 2015, this fig­ure is ex­pected to have in­creased by one more year.

To re­main com­pet­i­tive in­ter­na­tion­ally, the size of China’s work­force is crit­i­cal.

Ex­tant re­search stud­ies in­di­cate that, on the as­sump­tion that im­ple­men­ta­tion of the pol­icy takes place in 2015, China’s pop­u­la­tion will pro­ceed to peak at 1.401 to 1.412 bil­lion in 2026 to 2029, com­pared with a peak range of 1.392 to 1.41 bil­lion in 2023 to 2025, should the one-child pol­icy re­main un­changed.

In a nut­shell, the pol­icy change should re­sult in an ad­di­tional 9 mil­lion births over the first decade or so af­ter im­ple­men­ta­tion. A rel­a­tively small pop­u­la­tion in­crease, but an in­crease none­the­less.

And, cru­cially, some sort of counter against the un­stop­pable ag­ing pop­u­la­tion.

Not that this pol­icy alone will be suf­fi­cient to en­sure a work­force of crit­i­cal mass and an in­creas­ingly mod­ern, demo­cratic busi­ness cul­ture in­side Chi­nese busi­nesses, but it cer­tainly pro­vides a timely nudge in the right di­rec­tion.

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