China to ease one-child policy

China to ease one-child policy: Xinhua

Friday, November 15, 2013 – 20:58


BEIJING – China will relax its hugely controversial one-child policy, state media said Friday, in a major policy shift announced days after a meeting of China’s top Communist Party leaders. Couples will be allowed to have two children if one of the parents is an only child, the official news agency Xinhua reported, citing a “key decision” made by leaders at this week’s gathering, known as the Third Plenum. The policy was brought in during the late 1970s to control China’s huge population, the world’s largest. But it has at times been brutally enforced, with authorities relying on permits, fines and, in some cases, forced sterilisations and late-term abortions, with pictures of the results causing horrified reactions.Critics also argue that it has contributed to the gender imbalance in China, where sex-specific abortions remain common. Almost 118 boys were born for every 100 girls in 2012, and female infanticide and the abandoning of baby girls have also been reported.

“The birth policy will be adjusted and improved step by step to promote ‘long-term balanced development of the population in China’,” Xinhua reported, citing the party decision.

The law currently restricts most couples to one child, with one of the exceptions allowing a second if both parents are only children. Others exempted include ethnic minorities and farmers whose first child is a girl.

Despite calls for the relaxation of the family planning policy and rumours that it might be reformed, Chinese officials have repeatedly argued that it is still needed, saying that over-population threatens the country’s development.

At the same time census officials warned earlier this year that China’s working-age population had begun to shrink for the first time in recent decades, falling by about 3.45 million to 937 million in 2012.

The drop added to concerns about how the country will provide for its 194 million elderly citizens, who now make up 14.3 per cent of the population, a nearly three-fold increase from 1982.

“For older generations, life is going to be very painful,” Sun Wenguang, a retired academic from Shandong University in Jinan, told AFP earlier this year.

Most only children currently face the daunting task of looking after two parents and four grandparents in a society where many elderly are still cared for by relatives.

Those seeking a loosening of the family-planning law saw signs of hope in April, when China’s family planning commission, whose hundreds of thousands of personnel ensure the rules are followed, was merged with the health ministry at the country’s annual parliament meeting.

China to Ease One-Child Policy

Leaders Will Also Abolish Re-Education Through Labor


Updated Nov. 15, 2013 7:43 a.m. ET

BEIJING—China’s leaders agreed to loosen the nation’s one-child policy and to give market forces a greater role in the world’s No. 2 economy, according to new details of a blueprint for reform released on Friday.

The proposals follow the end on Tuesday of a four-day meeting of top Chinese Communist Party leaders, and they represent the first comprehensive road map for reform under new Chinese President Xi Jinping.

While a preliminary summary of the meeting released on Tuesday was vague, the more-detailed document released on Friday sketches an ambitious reform program designed to address problems that China faces: maturing growth, rising worries about a wide wealth gap and endemic pollution, and increasingly vocal criticism of Beijing’s handling of a number of social issues.

“More attention also needs to be paid to employment, income levels, social security and people’s health,” the document said.

The test now for Mr. Xi and China’s leaders will be how to implement many of its goals, including whether they will be introduced in coming months or will be introduced more gradually. The leadership is likely to face resistance ranging from state enterprises and the bureaucracies that oversee them to local governments, which have been frustrated by attempts at piecemeal reforms in recent years. A special leadership committee to oversee reform, which was announced previously, is supposed to address possible resistance, though the document provides few details on how it will do so.

The document said China would significantly ease its one-child policy, allowing couples to have two children if one of the parents is an only child. Currently, Chinese couples are restricted to one child except under some circumstances, such as rural dwellers, pilot programs in a number of areas and among ethnic minorities.

Enacted in 1980, the policy has been lauded by officials for taming a surging population from a years-earlier baby boom. But economists say it risks eroding China’s competitive advantage, draining its labor pool of future workers as the population ages and puts a greater strain on China’s emerging social safety net.

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The policy has also come under fire for local-level abuses such as forced abortions and sterilizations—practices that are illegal in China but are sometimes used by local officials to meet their family-planning quotas.

On economic matters, Chinese leaders said they would establish a system for insuring bank deposits, prepare a mechanism for financial bankruptcy and ease controls on prices for energy, water, telecommunications and other services. They will also increase the amount of profits that China’s vast state-owned enterprises pay to the government.

It also said it would ease curbs on offshore securities investments and mergers and acquisitions, without providing details.

The moves follow calls by economists for Beijing to loosen its grip on capital controls and allow private capital to have a greater role in China’s economy. Economists say China’s traditional reliance on government investment and exports to fuel its economic growth is unsustainable, and China’s leaders have called for a greater role for China’s growing consumer class in powering growth.

The document set few firm deadlines. One of them raises the proportion of profits state companies must return to the treasury, increasing that rate to 30% by 2020, from a current range of 5% to 15%.

China also plans to abolish a controversial labor camp system in what Xinhua described as “part of efforts to improve human rights and judicial practices.” Under the system, which has been in place since 1957, police are allowed to imprison people in labor camps for up to four years without formal arrest or trial.

Public outrage over the system swelled earlier this year, after a woman named Tang Hui was sent to a labor camp after petitioning authorities for tougher penalties for the men convicted of abducting and raping her daughter. Ostensibly set up to as a way to keep petty crimes from clogging the courts, in practice it is used to imprison petitioners and other politically disruptive people.

Officials had signaled intentions to either reform or abolish the system, known as re-education through labor, as early as January, but this marks the first time the government has mentioned abolishing it in a formal document.

The document stressed resource conservation to combat severe environmental degradation, which has emerged in recent years as a major point of social instability. It added that further liberalization of resource pricing would play an important part in that effort.

Perhaps most notably, the document said in certain parts of China, local governments wouldn’t be judged on economic performance alone, and that environmental protection would play an increasingly important role in evaluations. Environmental scholars have long said cadres in China had a disincentive to protect the environment because their promotions were tied too closely to economic growth and other factors.

The government also said it would step up health-care reform, accelerating an overhaul of its public hospital system to create more community hospitals and relieve overrun facilities in big cities.

Authorities will also change the way that doctors are paid to try to address the low wages that have contributed to bribery and corruption in hospitals. It also said catastrophic health insurance would be offered for the first time as part of the health insurance system.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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