China’s Demographic Future by Dan Steinbock, Difference Group

The long-anticipated abolition of China’s one-child policy is a first step in the right direction. But much more can be done.

In the West, one-child policy is often criticized as a “cruel Communist strategy.” In reality, most opponents of that policy were Marxists and the idea itself came from the West.

Overpopulation or old population?

Like in most countries, the birth rate in China began to fall with industrialization and urbanization. In the Mao era, the crude birth rate almost halved from 37 to 20 per thousand, while infant mortality declined by over 75 percent. In the process, life expectancy almost doubled to 66 years in 1948-76, while population grew from 540 million to 940 million.

In the 1960s and 70s, birth planning was seen as a solution to China’s economic problems and the slogan was “later, longer, fewer”; later marriages, longer spaces between children, and fewer of them.

While Mao’s view was that population growth could empower the country, Deng Xiaoping favored reducing population growth. But even Deng advocated a goal, not a specific policy measure.

During a 1978 international conference, cybernetics expert Song Jian met Dutch theorists who had contributed to the then-famous Club of Rome report, Limits to Growth. Based on modeling, it forecast a catastrophe if world population would not be limited.

Based on these assumptions (which were discredited later), Song’s own projections suggested that, without birth rate limitations, China’s population would explode. The seemingly “scientific” ideas appealed to many in China, which had coped with years of ideological excess.

As several Marxist theorists opposed Song’s ideas, one of these critics, Lian Zhongtang, argued that “one-childization” could impose grave social costs upon the peasants. Nevertheless, the one-child policy was adopted in 1979.

Not a one-size-fits-all policy

Ever since then, the policy has been widely criticized in the West. Yet, the new policy, which was initially designed as a one-generation measure, was never fully materialized in practice in China.

First of all, the policy allowed many exceptions and ethnic minorities were exempt. In accordance with China’s affirmative action policies toward ethnic minorities, the latter have usually been allowed to have two children in urban areas and 3-4 in rural areas. In turn, ethnic Han people living in rural towns have been permitted to have two children.

Until the 2010s, only a third of China’s population was subject to a strict one-child restriction. More than half of the Chinese were also allowed to have a second child if the first child was a girl.

Finally, the policy was not enforced from Beijing, but at the provincial level. As a result, enforcement varied and some provinces relaxed the restrictions. For instance, after Henan’s policy relaxation, majority of the provinces and cities permitted two parents who came from one-child families to have two children.

Toward a new policy

In early 2013, I argued that Chinese population trends were at a crossroads. A year before, the working-age population (15-59 years) registered a decline, dropping by 3.5 million to 937 million. I believed that China needs a new demographic future because the realization of population policy shifts takes years and China’s economic growth is becoming reliant on human capital.

The first policy change came in November 2013, when China relaxed its one-child policy. Now families could have two children if one parent was an only child. In practice, the revision applied primarily to urban couples, since there were few rural one-child families.

Nevertheless, while 11 million couples in China were allowed to have a second child, barely one million couples applied to have a second child in 2014; less than half the expected figure of 2 million per year. Only half of eligible couples wished to have two children, mostly because of the costs associated with the second child.

That led the government to abolish the one-child policy in October 2015, allowing all families to have two children. The new objective is to cope with an aging population and “to improve the balanced development of population.”

More reforms needed

Population growth rate in China peaked at 2.8 percent in the mid-1960s. By 1981, it had been halved to 1.4 percent and today it is close to 0.4 percent. In the process, median age has almost doubled from 22 years to almost 36 years. To cope with such trends, much more is still needed.

  • China could consider “pro-natalist” policies that support human reproduction with incentives (a one-time baby bonus, child benefit payments or tax reductions, paid maternity and paternity leave, etc).
  • China can promote pro-growth policies by raising the retirement age, increasing the share of the working force and accelerating retraining.
  • China could contain cruel traditional cultural norms, such as son-preference bias, which continue to prevail, while casting a dark shadow over the realization of women’s true potential.
  • While the return of high-skilled Chinese Diaspora is already promoted, along with green card schemes to foreign talent, China could accelerate more comprehensive skill-based immigration.

Like many other economies, China needs fewer old people, more women and young people. What makes China different is not the kind of demographic challenges it has to cope with, but their magnitude – which is a legacy of the one-child policy.

Unlike most countries, however, China’s government has a more consequential role in the economy. Beijing could seize that role and push bold policy experiments as long as they emulate the wishes of the Chinese people and long-term growth prospects.

The author is a columnist with China.org.cn. For more information please visit: http://www.china.org.cn/opinion/DanSteinbock.htm

Dan Steinbock is research director of international business at the India China and America Institute (US) and a visiting fellow at the Shanghai Institutes for International Studies (China) and the EU Centre (Singapore). See http://www.differencegroup.net

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