China has announced the easing of its so-called one-child policy, a policy that restricted many couples in China to a single offspring, although there were always many exclusions, such as an exclusion for rural people, or for couples where both partners were only children. Some parts of the media have hailed this as an important transformation, but the reality is that this is more of a symbolic gesture than anything else. The policy change is unlikely to affect Chinese fertility levels, which are being driven more by changing levels of income and education than anything else. Instead, as Frontier Advisory’s Martyn Davies argues, the move should be seem as a political tactic intended to give Chinese citizens a sense that their government is responding to their desire for increased political freedom and accountability. – FD
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ALEC HOGG: China is easing its one-child policy after decades of having it in place. Joining us now on the line from Abu Dhabi to discuss this impact is our ‘china’ on China, Dr Martyn Davies from Frontier Advisory. Martin, I know you’re there for the World Economic Forum’s global agenda council. We’ll touch on that in just a moment, but it’s big news coming out of China and already market commentators like Sasha Naryshkine was saying earlier that maybe he should be buying some shares in Aspen because it will benefit from this. It seems premature, but it is a big change on the one child.
DR MARTYN DAVIES:  Good day, Alec. Yes, I think it’s symbolically and politically important, but in reality, the net impact will be negligible. I would argue that the one-child policy in China has been in place since 1980. In theory, if you are 33 and below, in the majority of cases you are going to be…you won’t have any siblings. Already, for many years now, if you are of that generation – 33 and below – you are allowed to have two kids already anyway. Will people 33+ be rushing to have more children? Probably not, so I would argue that it’s more of a symbolic gesture, one about conserving more rights on a population commensurate with development in China. It’s certainly a very different China today than in 1980 when it was instituted, but I don’t think we should get too excited in real terms around this new policy announcement.
GUGULETHU MFUPHI:  Martin, it’s Gugu here: then why make an announcement like this? Why does it matter?
DR MARTYN DAVIES: Look, I think the Chinese state is balancing a number of things here. Firstly, the continuous economic reform drive and China is a country, a society, and a government that always seems to… In most cases, most countries, and most states only reform when there’s a crisis. The Chinese government has been successful for the last three decades in reforming itself despite a crisis or prior to a crisis, whether it be sort of a Soviet disintegration in the 90’s, whether it’s the Asian financial crisis, whether it’s a Western financial crisis, China has become almost crisis- resistant by reforming. That’s the economic angle. I think politically, China needs to balance that. They’re still very a authoritarian, very rigid state structure, and political structure. Thirdly, I think the government at the same time – the country – the state needs to come across as a softer institution, one with more accommodating people’s rights that are more expected these days with the level of development in education etcetera. It’s largely a non-announcement I would say. I think symbolically it’s incredibly important, but conferring rights that maybe already exist in reality, but made into law more for optics perhaps than to have the Chinese population engaged in its own state/government.
ALEC HOGG: Martin, what is certainly not a non-announcement here in South Africa and our media has it all over the place, is the withdrawal of an honour for our deputy president Kgalema Motlanthe. Apparently he boarded an aeroplane, went off to China, and the speculation is that somebody very senior in this country, told the Chinese ‘don’t give him the honour in the first place’. Of course, it’s been speculated that Zuma was the one behind it, but why would the Chinese do something unusual like this?
DR MARTYN DAVIES: I don’t know exactly how that panned out. I will be seeing some Chinese friends here later, so maybe we can discuss that. Personally, I did hear of the recent visit of the deputy president. He’s the deputy president and from a protocol perspective, the Chinese government does have to host in a certain way. I wasn’t part of that visit. If there were any issues between word from Pretoria and the processes of the industry – our embassy in Beijing as well as the protocol by the Chinese liaison – there are differences. It is rather embarrassing for the host as well as ourselves. Whatever we do…a relatively small issue like this: I’m not sure how it panned out. We do need to, as a country – whether it’s the Chinese or anybody – project a far more coherent political unit/image when engaging foreign countries, particularly those as important as the Chinese.
ALEC HOGG: Yes, the implications as you say are quite a lot more significant than whoever did – if they did make that call in the first place. In closing, the global agenda councils of the World Economic forum where you are right now in Abu Dhabi: what’s the major issue on the agenda?
DR MARTYN DAVIES: The World Economic Forum – in typical grand fashion – comes up with ten key top trends for next year. Each one is thoroughly discussed and analysed and the Forum seeks to put solutions out there to the top trends ranked by global significance. The first one is rising societal tensions in the Middle East and North Africa. [Unclear 5:12} I think that’s obviously sort of a local interpretation of what the major trend is globally – the challenge. The second thing is the widening income disparities which we know all too well in our part of the world. The third thing is persistent structural unemployment. There are six or seven more, but these are the sorts of major issues, which, over the next three days until Wednesday evening, we will be discussing. There are global agenda council groups as you know Alec, and everyone talks. These themes direct and permeate through our conversations over the next three days. There are about one thousand people here and ultimately on Thursday we’ll be issuing some communiques or results of ‘how do we take this forward? How do we address these major global trends and challenges facing our global political economy next year?’
ALEC HOGG:  Doubtless, we’ll be talking about all of those issues from Davos in January – the late part of January 2014 – just around the corner. That was Martyn Davies, Chief Executive of Frontier Advisory.
