It has been an article of faith among the Chinese leadership that growth in population within China needed to be curtailed so that a deliberately dynamic, expanding, force-fed economy would not be overrun and short-circuited by growth in population. Accordingly, a "one-child policy" was instituted many years ago, which imposed penalties upon husbands and wives who produced more than one child. That policy continues to this day. The result has been the creation of an entire generation much smaller in number than would otherwise have been the case. In concert with this program, its effects have been enhanced by an ingrained cultural preference for male children rather than girls, which has led to abortions of female fetuses on a large scale. One result has been, and will continue to be, the inability of many young Chinese men to find wives, which may lead to social disruptions in the future - but that's another story.
In recent years, financial commentators have marveled at the glories of the Chinese stock market and the seemingly unending opportunities for profit by investing in Chinese companies. Forecasting may have been founded, in part, by the sheer size of the population of China and a (seemingly) unending supply of new domestic customers for the foreseeable future. One wonders, however, whether the golden future may come to be attenuated by growing social and economic problems which eventually will come to the fore as a partial "missing generation" is required to support an increasingly aging population.
One wonders, as well, whether in these respects an interesting comparison can be made as between China on the one hand and India on the other. While China's population is growing older, Indian's is growing younger. There is no restriction, in India, on the number of children which a married couple may bear. As in China, there is great expansion of the industrial base. The inhibitions of Nehru socialism have been largely cast aside, capital flows freely, and individual enterprise is encouraged. India has become a virtual "back office" for many U.S. international companies. The information technology manufacturing and servicing businesses are thriving. And, as perhaps one lasting benefit of the British Empire, the English language is spoken widely by the entrepreneurial and general business class, which is not the case in China. And last but not least, India is a free society, which China is not. The innate human demand for freedom will one day overwhelm the Chinese political system. One can only begin to imagine what the outcome of that revolutionary explosion will be.
So, while current focus has been on the construction and production marvels of the Chinese economy, and on the Chinese leadership's driven intention to show off at the Olympics (which may yet turn out to be a bit of an embarrassment), perhaps India presents at least as favorable an opportunity for investors.
Article Source: http://www.articlesbase.com/culture-articles/china-getting-old-before-getting-rich-379899.html
About the AuthorAuthor (as CandleWave, LLC) publishes investment advisory newsletter, at http://www.candlewave.com/ Passed NASD Series 65 Investment Adviser exam. Creator of "Candelaabra" technical analysis system. Ret. atty and corporate EVP.
