China May Revise One Child Policy Further

China may further revise its family planning laws, after a relaxation in the controversial “one child” policy did not result in the expected level of increase in births. The goal was to increase the number of births, particularly for families where one of the parents was an only child. The one child policy has created a severe gender imbalance because families prefer to have a son and this has its own host of ethical issues. Nearly 116 boys were born for every 100 girls in China in 2014, and in the total population the ration is 105 men to 100 women. Only 470,000 additional babies were born once the policy was relaxed, representing 1/10 of families newly eligible to have a second child. The fact is that families could have a second child even during the policy if they were willing to pay the fine or unless they worked for the government, and as always only the majority Han culture is impacted by the law at all (minorities always could have multiple children).

Foreign Investment Restrictions to be Cut in China

The results of business within the Shanghai Free Trade Zone under rules that were put in place to test their efficacy seem to please China’s State Council because officials there tout the FTZ as a success and have recently announced a reduction in the number of sectors that are restricted from foreign investment. The reductions occur primarily in the manufacturing and services areas, including: ethylene, papermaking, and electric transformation equipment industries, e-commerce, logistics, transportation, finance and culture sectors. The number of restricted sectors has been cut from 79 to 38. However, the same article states that the number of restricted sectors within the Shanghai FTZ has been cut from 190 in 2013 to 139 in 2014, so it is difficult for us to see the difference in those tallies.

The American Chamber of Commerce says that the FTZ has produced no tangible benefits to foreign businesses yet, while the Chinese government says that it will open more FTZs in Guangdong, Tianjin and Fujian because the success in Shanghai has been great and will even get better. It is positive that reductions are being made, and we hope that foreign companies will be able to realize benefits from those reductions in restrictions.

Weibo’s Steady Growth

Sina Weibo, the Twitter-alternative of China, has seen slower growth but as of the end of 2014 had 176 million monthly active users, up 36% over 2013. Weibo competes against many forms of social media, including the wildly popular Tencent WeChat (weixin) service favored by many Chinese (and foreigners).

Niko Partners on PCWorld

Niko was recently interviewed by PCWorld about the upcoming launch of the Sony PS4 in China and how the console war might play out.