Although China’s one-child policy ended after 36 years in 2016, there are few signs that this is leading to a significant up-tick in the birth rate. Andrew Lee explained the economic, social and psychological constraints of having a large family include high real estate prices, the need to care for elderly relatives, and concerns about having children who will then face a hyper-competitive educational environment.
The Chinese authorities are aware of these concerns, with challenges over property ownership, health care and education being increasingly dubbed the “three mountains”. Action has been taken in recent years to moderate housing costs, and this is putting pressure on a sector that accounts for about a third of the country’s GDP. Some analysts are concerned about the potential for wider economic impact if the heavily indebted construction industry comes under strain, but Andrew Lee is optimistic that these challenges can be managed.
In the podcast Andrew Lee outlines some of the measures being employed to make access to health care more affordable. He also mentions the ongoing work to reduce the stress generated by the hyper-competitive education system.
Recent years have also seen the Chinese authorities intervening in the technology sector, action driven partly out of concerns of some companies becoming too dominant. Andrew explains the rationale behind some of these moves, such as a desire by the authorities to allow innovation and entrepreneurship to flourish, particularly in small and medium-sized businesses.
Andrew rounds off the podcast with an overview of the main investment opportunities being generated by these changes. Renewable energy and health care are two stand-out options, and he also said investing in the property management services could be seen as interesting. “Despite all the noise and challenges, we think that there are many attractive investment opportunities in China. But we just have to be very selective,” he said.
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