Freedom Line Blog

The Wall Street Journal reports China’s controversial one-child policy will have disastrous effects on the country’s capacity for economic growth, a stunning rebuke to policymakers who argue that predetermining fertility rates is key to eliminating poverty.

Since the one-child-per-couple policy went into effect in 1980, over 400 million births have been prevented, decreasing the amount of poor people and thus the rate of poverty.  (Though since the policy applies to everyone, it has also reduced the amount of children born to middle class and wealthy families; i.e. those most likely to produce entrepreneurs and innovators.)

An informal advocacy group in China is trying to overturn the one-child policy because of a generational imbalance that threatens continued economic growth:

They say China’s elderly population is expanding rapidly as Mao-era baby boomers retire, putting new burdens on society to cover the cost of their retirement. At the same time, China’s labor force is due to start shrinking in 2016, reversing the demographic phenomenon of a widening pool of low-cost labor that powered a manufacturing boom over the past three decades.

It takes people to grow an economy.  If Chinese policymakers continue to eliminate entrepreneurs and workers from the economy, they will soon experience the same chilling effects of the demographic winter settling in over Western Europe and Japan.