Out of Control Policy Blog

A labor shortageóin China?

    The world's most populous nation, which has built its economic strength on seemingly endless supplies of cheap labor, China may soon face manpower shortages. An aging population also poses difficult political issues for the Communist government, which first encouraged a population explosion in the 1950's and then reversed course and introduced the so-called one-child policy a few years after the death of Mao in 1976.

    That measure has spared the country an estimated 390 million births but may ultimately prove to be another monumental demographic mistake. With China's breathtaking rise toward affluence, most people live longer and have fewer children, mirroring trends seen around the world.

    Those trends and the extraordinarily low birth rate have combined to create a stark imbalance between young and old. That threatens the nation's rickety pension system, which already runs large deficits even with the 4-to-1 ratio of workers to retirees that it was designed for.

Although it's sort of chilling to consider what passes for liberalization, there are signs that the Chinese government is loosening up somewhat:

    It now allows husbands and wives who were their parents' only children to have a second child, for example, and has eliminated a four-year waiting period between births for those eligible to have a second child.

More here.

Ted Balaker is Producer


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