This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Fear and Steep Fines Still Haunt Chinese Families

TAIPEI ( TheStreet) -- In 2005, I interviewed a Shenzhen mother who had just given birth to a second baby and lived in fear of paying a steep fine if caught for violating the one-child policy. She and her husband weren't alone.

China is expected to ease its one-child policy next year and abolish it by 2016 following a proposal from  China's ruling party session last month. Communist officials aim to shore up the domestic labor force and add consumers to the economy, but their move will deliver too little too late.

"In brief, the impact of the policy on the size of workforce will probably be much less than many people think, as not all couples want to or can afford to have a second baby," says Wang Qinwei, China economist with London-based Capital Economics.

The one-child policy handed down in the late 1970s put then reclusive China on the world map for the unusually authoritarian way to control population growth. The policy has held since then, though with more recent exceptions for rural families whose firstborns are girls (not seen by traditional Chinese as farmhands) and for couples who are both single children themselves.

The slow-growth policy has pushed the fertility rate down to 1.6, compared with about 2.4 for other countries at China's level of development, Capital Economics has found. That's also below China's replacement level of 2.2 The population aged 15 to 59 is set to fall by around 7% between 2010 and 2030, United Nations figures show.

And that's bad for productivity, a scenario that could raise labor costs for simple supply-demand imbalance reasons, further hobbling China's once world-class reputation as a place to go cheap while building out multinational corporations such as Microsoft (MSFT - Get Report) and Anheuser Busch Inbev (BUD).

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
BUD $122.56 1.20%
MSFT $40.97 -0.58%
AAPL $123.25 -0.80%
FB $83.30 0.35%
GOOG $548.13 -1.30%

Markets

DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs