In this interview given to Maya Hojeij from Asharq Business Bloomberg, Christof Rühl, member of the Advisory Board of Crystol Energy and a Senior Fellow at the Harvard Kennedy School and the Center on Global Energy Policy at Columbia University, comments on the economic impact of China’s three-children policy.
Christof argued that the economic implications of the new policy are not as important as some claimed. The first reason is that, in the past, China’s birth rates have been declining constantly without being driven by birth restrictions imposed by the government, albeit the reasons are purely economic and institutional. China is an emerging economy and its people are chasing wealth, so raising a child would be costly on the Chinese family. The second reason is that China has some mobility restrictions between various areas, so not being able to freely roam around the country will make people hesitant of having a child since they don’t guarantee to benefit from the basic services provided by the government.
Christof said that a better alternative to birth restriction policy is to provide a child care system that eases the pressure on Chinese parents and frees up more time for other commitments.
Finally, Christof refuted the argument claiming that an increase in population leads to a stronger economy. For example, the Swiss and United Kingdom’s economies are performing relatively well compared to their population demographics.
“Global Economy and Energy Markets Weekly Commentary – 30th May ‘21“, Christof Rühl, May 2021
“China’s economic growth performance“, Dr Carole Nakhle, Apr 2021