The pretty side of the One-Child Policy

one-child policy of China
a poster for one-child policy propaganda

From the western world’s perspective, the one-child policy of China was just evil. We have all heard of some horror stories about the one-child policy. You can find online –  thousands of negative stories about it. However, I’m here today to talk about the positive side of the one-child policy. From the Australian perspective: How does the one-child policy of China benefit Australia? Moreover, what are the positives outcomes of the one-child policy to Chinese?

one-child policy and the Australian education industry

The downturn

Doing what I do, I had the opportunities to understand one of the most significant risks faced by Australia’s leading universities. The concentration risk on the Chinese international students market. It is no secret that, due to tensions between the Chinese and Australian government, the Chinese government has warned Chinese student not to go to Australia. Some Australian universities believe the answer to this problem, is India. However, is it?

India and China are both large developing countries with fast economic growth, but what are their differences? Why you can’t just replace Chinese traffic to Australian universities with Indian traffic? There are too many things we can talk about. I’m going to focus on only one today – the One-child Policy.

India never had a one-child policy. On the other hand, China had it for over 30 years. It was only from 2015 that the Chinese are allowed to have two children per family. Pretty much all the Chinese international students in Australia (or anywhere in the world) are the only child. This means that they are the only child that their family needs to invest on. Let’s put an Indian family and a Chinese family side by side. Both have the same level of income and savings, but the Indian family has three children (probably a small size family in India).

The Chinese family has only one child. Let’s also assume both families are willing to invest 50% of their household income/savings for their children’s education – how much revenue can we make from the Indian international student, in comparison to the Chinese international student? One third only.

The solution

It’s oversimplifying the numbers, I know. To do a proper calculation, you need to put in hundreds of variables like the segment of population and exchange rates etc. However, I’m 100% confident about the outcome. Regardless of what financial model you put them in, you can’t easily replace the Chinese international student traffic with any other country. Also, the real problem we are facing here is not that the demand for international education from China has dropped. It is that – the demand for international education from China (to be provided by Australia) has fallen.

Chinese families are keen to send their children to study overseas since 1900. The flow has been interrupted by the world wars and cultural revolution, but it picked up quickly since twenty years ago. It will continue to grow fast – the only problem is that they hesitate to come to Australia now, due to the unnecessary tension between the governments.

Now I’m a bit off the topic. Let’s go back to the one-child policy. The last year of the one-child policy in China was 2015. This means that Chinese families will continue to send their only children overseas to study between now and 2033. (Assuming the students are over 18. However, even younger children study abroad these days). The traffic is still there, with higher and higher disposable income. If we understand this positive side of the one-child policy, we should be working on how to fix the relationships and capture a more significant share of the traffic.

The Chinese market for aged care

I was talking about the one-child policy at an author talk last year. A lady asked a good question. “With over 30 years of one-child policy, why didn’t Chinese population drop at all?” That’s an excellent question. Also, the answer is simple too. While the birth rate dropped to somewhere around one child per family, the death rate fell even further. After 30 years of one-child policy, we ended up with a family structure of one child plus two parents plus four living grandparents, and maybe even living great-grandparents. It’s an old society.

What opportunities are there for Australia? Too many. I’ll focus on a simple one that is related to the one-child policy. For my parents, when they reach retirement age, they will want to live in Australia for at least a couple of months each year, to be with their grandchildren and to breath some clean air. While they don’t get any social benefits from Australia, my family will need to spend much money on travel, accommodation, medical, entertainment for them, etc. Not to mention the basic needs.

Moreover, when they go back to China at the end of their visit, they will buy as much Australian nutrition products (e.g. finish oils) they could carry, for my grandparents and my aunties and uncles. There are thousands of Daigous (shopping agents) who has already been shipping tons of these products to China now. The healthcare and aged care industries will benefit greatly for the next half-century by the Chinese market alone. (Assuming they are willing to sell to the Chinese. If they don’t, other countries will.)

Overall, is the one-child policy ugly or pretty?

I can’t say. Not because I don’t have an opinion on this, but because the question itself is flawed. I have no doubt there are a lot of ugly consequences at the micro level, but I see many pretty outcomes at the macro level. Regardless of the past, the one-child policy will continue to affect not just the Chinese people, but rest of the world who trades with China.

I want to end this article with my father’s story. I’m the only child of my family. I’m very sure that this is what my parent’s wanted. They were not forced to have only one child. They benefit greatly from this policy. Why? Because having fewer children has given them great flexibility and lots of time to focus on their career. Their story is in the first chapter of my book.