China Shift Hopes to Diffuse Demographic Time Bomb

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Nov. 15 (Bloomberg) -- On today's "Off The Charts," Bloomberg chief markets correspondent Scarlet Fu displays the dramatic drop in China’s fertility rate and the potential economic impact of the slowdown in population growth as the nation announces an amendment to its one-child policy. She speaks on Bloomberg Television's "Market Makers."

Change, the biggest since 1990. perhaps, the most significant in the world.

Absolutely.

This has been in place since the late 1970s and it prevented 400 million births from 1979 through 2011. it will have big repercussions.

It could lead to 9.5 million additional babies per year.

400 million from 1979 until when?

2011. more babies were not born in china than people who live in the united states.

Isn't that remarkable?

It is all because it wanted to lift itself out of poverty, solve a lot of budget and economic problems during the time.

If you look at the chart, which illustrates how the fertility rates have plunged, it really tells the story.

Back in the 1960s, the average number of births a woman gave in her lifetime was six.

That is the peak.

Right now, it is below two.

Right before the cultural revolution.

The one child policy came down in 1979. right now, 2.1 is needed to sustain a population.

China's population is currently on a path to shrink.

Yes, and this is going to be a bigger and bigger issue with fewer working age people to support their seniors.

They will need more health care, more insurance.

The second chart shows the demographic time bomb in china.

Back in the early 2000's, there were five working people for every elderly person.

Now there are about four polls -- around four.

In 2030, there will be two.

Before they pass this legislation, people had to go and visit elderly relatives?

People are pursuing their own financial well-being and forgetting a lot of the other things.

We get into some cultural discussions here.

This is extraordinary.

What is also interesting is that only one third of the population were restricted by the one child policy.

There were a lot of exceptions.

If you are not in the majority ethnic group, if you are living in the countryside, and it both of your parents were single children, many could have two children.

That was already in place.

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

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