One-Child Policy Feeds, Pops China's Housing Bubble
IMAGE: Schweitz Finance


According to a recent research paper by scholars at Columbia University, Tsinghua University, and Peking University, China's gender imbalance is responsible for "socially inefficient" increases in housing, which will eventually pop as an entire generation of single children enter into their inheritance.  In an interview with Quartz,


Peking University economist Zhang Xiaobo said:  "I just returned to Beijing [from Washington, DC], and housing prices are three times that of DC.  If you look at the indicators, there's a housing bubble.  But despite the very low economic returns, people [keep buying]."  This is due to the competitive marriage market, in which a surplus of 37 million bachelors (caused by gendercide and the One-Child Policy) must prove their wealth in order to win over a bride.


Housing prices are being driven up by significant amounts due to this artificial housing bubble; for instance, a small two-bedroom apartment in Beijing is worth about 32 times the average local income.  This phenomenon is happening not only in the urban centers, but also in the countryside, where Zhang and his colleagues found that farmers were also aggressively buying homes for their sons.  The chart below shows the sharp correlation between housing prices and gender ratios (number of men per 100 women):


(iMAGE: "Status Competition and Housing Prices," Shang-Jin Wei, Xiaobo Zhang and Yin Liu)


But while the rise in housing prices is good for China's economy now, it is an artificial increase that will drop as soon as housing becomes overly abundant.  As Zhang describes it, the majority of Chinese couples born after 1980 are single children and will inherit four parents' wealth, which will likely mean at least two extra homes (and possibly more, given recent investment trends).  With so many extra houses and too few younger people to buy, housing prices will drop sharply.  


Add to this the fact that China's working age population peaked in real numbers in 2012 (and peaked proportionally in 2005), and the number of real estate consumers is due to drop quite precipitously, as shown in this image:




Given how disastrous the financial 2007-2012 financial crisis has been for global markets because of the bursting of real estate bubbles, one can only imagine how difficult it will be for China (and related markets) to weather this upcoming storm.  As the author of this Quartz article writes, "if Zhang and his colleagues are right—that marriage market competition is propping up home values—then China will have even more to regret about the one-child policy than it already does."


All Girls Allowed hopes that this will serve as a clarion call to global leaders, as we seek to avert a crisis in the world's second largest and fastest growing economy.  It is not enough to stand by, to avoid "meddling" in another country's affairs.  China's One-Child Policy is foolish in addition to being brutal, and its folly may reverberate around the world in the form of an economic crisis.  


We call the Chinese government to heed the words of King Solomon when he said, "The way of fools seems right to them, but the wise listen to advice. Fools show their annoyance at once, but the prudent overlook an insult." (Proverbs 10:15-16)  We pray that Chinese policymakers would heed wisdom from their own scholars and bring an end immediately to the One-Child Policy.


by Brian Lee, All Girls Allowed

Image insert: 

More Articles


Image: Two girls in the Orphan Care Program making cards together


On July 5th, the All...


I competed with this speech this past year in a Christian homeschool speech and debate league (Stoa). I have placed...


This week, Vice President Joe Biden was in China. In remarks to Sichuan University, he said something many are now trying to understand: “Your policy has been one which I fully understand—I’m not second guessing—of one child perfamily.”  


As founder of All Girls Allowed, a non-profit focused on helping girls and mothers who have been victimized by China’s One-Child Policy, I am deeply troubled by the Vice President’s statement.  At best, it is a statement of ambiguity that gives permission to China to continue its brutal and coercive...