The Real China News

While most commenters remarked on China’s transmogrifying its One-Child Policy to a Two-Child Policy, I think that they may have missed the real China news. China is reducing its growth target to 6.5%:

Premier Li Keqiang highlighted a minimum growth estimate for China in the coming five years that could indicate the leadership’s readiness to accept the weakest period of expansion since the economy was opened up three decades ago.

The nation needs annual growth of at least 6.53 per cent in the next five years to meet the government’s goal of establishing a “moderately prosperous society”, Li said in an October 23 speech to Communist Party members, according to people familiar with the matter who asked not to be named as the remarks were not public.

Communist Party leaders today conclude a four-day gathering to discuss their 2016-20 five-year plan for the nation, the first since President Xi Jinping and Premier Li took office.

“It seems that Premier Li is sending a signal through his speech that China’s government is likely to lower their growth target to 6.5 per cent in the 13th five-year plan,” said Le Xia, a Hong Kong-based economist at Banco Bilbao Vizcaya Argentaria. “The 6.5 per cent target is still a little challenging. A target of 5 to 6 per cent seems a more feasible one.”

Private economists have predicted a lowering in the five-year growth target to 6.5 per cent, down from 7 per cent in the current plan, a reflection of the Communist leadership’s continuing attempts to move away from debt-fuelled expansion.

You’ve got to read between the lines of these announcements a bit. The CCP is acknowledging that they’ve made mistakes. That’s huge. Earth-shattering.

And cutting the growth targets (even as the actual growth is probably substantially less) means that they’re throwing in the towel on the strategy that has served them for the last three decades. Just about 100 million people in China are in desperate poverty—a number only exceeded by India. The announcement is confessing that China will always have a large number of desperately poor people.

To be sure the end of the One-Child Policy is interesting. China’s population is expected to peak at something like 1.6 billion people in 2040. After that it’s expected to fall to something like half of that. Like Russia and unlike the United Kingdom, France, or the United States, China isn’t likely to replace that demographic collapse with immigrants. It’s just too xenophobic.

That would make an interesting exercise for a demographer. When will the U. S. population and China’s population cross?