18 Nov 2013

China signals big changes, but growth may be slowing

3:53 pm on 18 November 2013

China has unveiled details of major policy changes as the leaders ease the state's grip on society and the economy.

The BBC reports that the sweeping changes include relaxing the one child policy and boosting the role of the private sector.

The Government is also exploring measures guaranteeing equal treatment for foreign investors in some industries.

Many reforms will have immediate effect, partly because politicians are worried that too few children are being born to provide the workers needed to support China's rapidly growing segment of aged people in the population.

But the author of The Coming Collapse of China, Gordon Chang, says private enterprise will continue to struggle because the powerful state-owned enterprises will still have a leading role in the economy.

And he says that while some countries have been able to accelerate births, they usually cannot boost the overall birthrate.

"They will get some additional birts ... 10 to 16 million overall," he says. And economic problems will probably reduce the numbers of women willing to produce more children.

The overall population will likely peak in 2020, earlier than expected, he says.

Mr Chang says that another enormous issue will be that much of China's aspiring middle classes have never known anything other than double-digit economic growth, but the real economic economic is slipping to 1% or 2%.

"I don't think the Communist Party will be able to survive this challenge, because you're going to have a many people upset at the way things are going in China," he says.