China One-Child Policy a Pleasant Surprise: Economy

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Nov. 15 (Bloomberg) -- Elizabeth Economy, director for Asia Studies at Council on Foreign Relations, discusses the potential economic and labor impact of China easing the nation’s one-child policy and examines some of the other socioeconomic reforms announced today. She speaks on Bloomberg Television’s “Bloomberg West.”

The council of foreign relations.

What was your reaction to these announces out of china today?

I think the announcement on the one child policy was a pleasant surprise.

There had been indication that this was coming down the pipe, and it really does represent a positive step forward in terms of social liberalization out of the leadership that has not inserted much inclination to take these kinds of steps.

I think it was a positive move on the chinese leadership parker there are some staff suggesting that policy has contributed something like 400 million less births since 1980. alternately, how does this news affect the population, the labor force in china?

It is important to recognize this is not a transformative policy.

It is not an abolition of the one child policy.

What that says is that if the wife is a single child and the husband has a sibling, then you can have more than one child.

They already have a policy on the books that if you have both single parents, then you could have more than one child.

Really 10 million couples can have a second child now based on this new policy.

So there could be some significant implications, but a lot of demographers are saying that it might lead to one or 2 million new births per year.

China is right near the list of top tech spenders in the world.

I'm sure there are a lot of countries, especially in silicon valley, that do a lot of manufacturing in china that are wondering ultimately what this means in terms of their ability to do more manufacturing there.

What do you think we should keep in mind?

He was a poor thing to keep in mind that this policy is going to have an impact -- the one thing to keep in mind that this policy is not going to have an impact for another 17 years.

This is a policy that is going to start now.

So for companies that are investing in china and manufacturing in china, they should expect that they will continue to be a dip in terms of population, in terms of birth, but maybe in the next 17 to 20 years, you will begin to see a pickup.

What about the news china may be allowing for more private investments as state industries?

What could that mean for the economy?

That really depends on how this reform plays out.

That is something to bear in mind, the entire package that the tigers -- chinese leadership is announcing.

The devil is in the details.

It is potentially significant that they are going to allow for private investment may be a 10% stake in the state owned enterprises, but what is that really going to translate into in terms of corporate governments -- governments?

We do not know.

If you are a major investment, are you going to have a say the company?

Perhaps not.

Will this lead to the subsidy that states on the enterprise of have been sucking on land in energy, perhaps?

So again, i think it is a positive step, but we really are going to have to wait to see what the implement and

This text has been automatically generated. It may not be 100% accurate.

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