The current study aimed to examine the effects of One Child Policy and only-child status on children's social emotional outcomes, and the mediating role of family functioning on the association. It was hypothesized that the changing family structure and context with high emotional and material investment into only children due to the policy would lead to more negative family functioning and child social emotional outcomes. The current study recruited 707 third and fourth grade students and their parents to participate from Zhangjiakou and Shanghai in China. Children's, mothers' and fathers' reports were collected to examine both mothers' and children's only-child status, children's social emotional outcomes, parenting styles, parent-child relationships, grandparent involvement, parental relationships and mother's personality. Results found only children actually have better social emotional outcomes than sibling children due to positive family functioning, contradicting the hypotheses. No results were found between only children due to the policy and the rest of children. Post-hoc analyses revealed that the policy has affected the entire generation's family functioning who were born after the policy; the policy may have different levels of effects on girls than boys due to the son-preference culture in China. Future research should consider more factors regarding demographic information and family structures to investigate the policy effect on child social emotional health and development.