Critical Analysis of China's Coming Baby Boomlet Will Deliver a Boost Article by Wei Gu - Essay Example

Critical Analysis of the article: China's Coming Baby Boomlet Will Deliver a Boost The China’s population has beena subject of discussion since time immemorial. This is because China is the most populated country worldwide leading to an impact of its population on both socio-economic and political developments. I want to critically asses the article titled,” China's Coming Baby Boomlet Will Deliver a Boost.” It is an article posted on the Wall Street Journal on November 22, 2013 by its author Wei Gu. The article can be found through the link.” http://online.wsj.com/news/articles/SB10001424052702303653004579211310267946676” From the article and the authors standpoint, the issue arising is the fact that the government of the republic of China has since softened its legal position on the one-child policy. The legal position according to the article is that the China's top officials at the Third Plenum last week announced that families could have a second child if one of the parents is an only child. The current rules allow individuals to have a second child if both parents are only children in their families (Gu 2013, p1). Nevertheless, the Chinese middle class who live in China’s wealthy urban areas will majorly feel the impact. According to Merrill Lynch, it is in such localities where more than half the families with women of childbearing age will qualify to have another baby under such policies. According to James Liang, a Pecking University economic professor who has been vocal about the abolishing of the one-child policy rule reiterates that the new rule is likely to elicit a birth of 2-3 million births a year. According to this article, the baby Boomlet is viewed to maliciously worsen the China’s demographic dilemma. It is anticipated that the working population would shrink in the future resulting into a strain in both the pension and health-care systems (Gu 2013, p1). This is based on the assumption that individuals will get richer and hence want fewer children that will voluntarily regulate the birthrate with or without restrictions by the government. I am of the contrary opinion, my premise is that just like in any world economy, demand is vital, and the boom has the likely impact of contributing to the growth of the economy due to its impact on local demand. My evidence for such an argument is hinged on the fact that since 1978 structural changes have made china shift from a centrally planned economy to a market based economy and has since witnessed rapid social and economic development. The GDP growth rate witnessed since this time has consistently been 10% every year something that has seen over 500 million people being lifted out of poverty. The additional birthrate of 2-3 million babies yearly due to the new rules is therefore likely to create more demand for goods and services a factor, which has the impact of driving faster growth of the local industries and infrastructure, provision of employment opportunities (Owen III 2010, p104). Additionally, the kids are likely to even provide more capital that is human when they grow up. It is worth recognizing that China with a population of over 1.3 billion people is the second largest economy in the world after the US. In 2012, China’s gross national income per capita of $6,091 ranked 90th in the world of China. This is largely attributable to the boom as the growth rate in terms of the numbers is quite large. Actually, it is twice the number of annual births in Japan and half the total number of births in the US. Investors have already done their calculations and as they are presented according to a survey, it costs $79,000 to raise a child from cradle to college and this includes costs such as food, education, and healthcare. With 10 million children in the next 5 years the figure will be $790 billion additional spending on a lower value (Gu 2013, p1). The investors are already jogging to reap from the new outlays. The companies manufacturing stocks such as diapers and baby formula as well as the real estate sector is in a boom already. I look at the baby boom as a way of promoting economic growth but still there are others with a different view. Their argument according to the article is that investing more in children will mean that savings would deteriorate in banks and expenditure on flashy lifestyles would dwindle. This is despite the fact that most of the urban dwellers can afford this and still carry on their daily routines as usual. In as much as expenditure is good for the economy, the prudent view is that more population means more demand and hence more investment resulting into an economic growth (Owen III 2010, p106). Others also take the social standpoint and argue that they would rather have a child as opposed to having another apartment. This is despite the fact that the children would not necessarily assist them during old age. The urge for an extra child has even caused individuals go to an extent of going to have them in countries without restriction. China has experienced rapid growth due to the support they have from their huge population. A few disadvantages have resulted due to such growth such as high levels of inequality, challenges of environmental sustainability as well as external imbalances. A factor, which is completely independent of this scenario, is that of demographic pressures due to the aging population. This does not negate the fact that serious policy adjustments such as the relief of the one-child policy are required and are much in place for china’s growth to be sustainable (Owen III 2010, p110). In conclusion, the impact of the economy of China’s population is more positive than negative. This is because it is much in line with China’s 12th Five-YEAR Plan (2011-2015). The policies under such a plan are aimed at realizing a growth potential for the country in terms of industrial, infrastructural, development of services as well as measures to address both environmental and social imbalances (Owen III 2010, p108). This will go in hand in improving service provision to the newly born such as access to education, healthcare and still expand the social protection span all resulting into improved quality of life. Works Cited Gu, Wei. "China's Coming Baby Boomlet Will Deliver a Boost." The Wall Street Journal 1.1 (2013): 1. Print. Owen III, Henry. "The World Bank. Administered By The World Bank, 1818 H Street, NW, Washington, DC 20433. Retrieved May 2010 From Http://www.worldbank.org/.” Government Information Quarterly 1 (2010): 101-111. Print. Read More