Lily Kuo relays new developments:
China’s national health and family planning commission is considering allowing any couple where one parent is an only child to have two children. This would effectively suspend the one-child rule for many more urban couples, the largest group affected by the policy. Some anticipate the reform will be announced in the fall at the National People’s Congress, when key economic reforms are often unveiled. Chinese media report (link in Chinese) that authorities are also considering allowing all couples to have two children after 2015. If that happens, China’s population would increase by an estimated 9.5 million more babies (link in Chinese) each year over the first five years, according to Bank of America Merrill Lynch in a note over the weekend.
But it may already be too late to fix the economic damage:
China’s approximately 930-million-person labor force shrank last year for the first time in decades, and will decline further as a population bulge of people now in their 40s and 50s pass into retirement. Here’s how that looks:
A baby boom would help compensate, and increase the number of people who can support that aging population. However, it may be too little too late, given that the labor force is estimated to begin declining by as much as 10 million a year starting in 2025, and it will take at least 16 years for the effects of a baby boom that starts today to be felt in the workforce. The authorities may be unable to avoid unpopular measures like raising the country’s retirement age—55 for women and 60 for men.