China's two child policy starting to have some impact

Marcus Roberts
February 3, 2017
Reproduced with Permission
Demography is Destiny

If you have been an avid reader of our blog over the last couple of years (and if you haven't been, why not?) then you will have heard about the scrapping of the one-child policy in China and its replacement with the two-child policy. Although the one-child policy was barbaric, leading to invasions of privacy, barbaric treatment of pregnant women, fines, forced abortions and infanticide and death of women, (we've talked about all of these here before), the policy was not relaxed due to any concerns about its morality. Instead, the Chinese government is worried that its 35 year experiment in massive social engineering is now doing more harm than good economically and socially. That is, the one-child policy has been abandoned not because it is wrong, but because it is no longer useful.

The problem is that the one-child policy and decades of propaganda espousing the benefits of a small family have had the effect of fewer children being born (who would have thought?) Furthermore, those fewer children have been disproportionately male (shockingly so in some areas) due to the abortion and infanticide of female children in a culture that prizes male children - if you're only allowed one, better make it a boy! This has meant a coming surplus of males and fewer workers entering the workforce at the same time that Chinese are living longer and there are more retirees. The demographic surplus that has benefitted the Chinese economy so much in the last three decades is now drying up. Hence the two-child policy: more babies will mean that there are more future workers and taxpayers.

However, the latest government report, announced last week, and reported by CNBC , suggests that the relaxation has had an impact, but not yet had the desired effect on Chinese birthrates. The number of births in the country has increased by 7.9 percent from 2015 to 2016, and, at 17.86 million, is the highest since 2000. However, it is still below the figure of 20 million that the government hoped would be reached due to the two-child policy, and even 20 million births per year would not solve China's demographic issues. CNBC reports:

"The report released Wednesday warns that China faces a turning point over the next 15 years, particularly between 2021 and 2030. The aging of the population will accelerate, increasing pressure on social security and public services. At the same time, the working-age population will shrink, damaging economic growth and reducing the tax income required to support the elderly. The report predicted that a quarter of China's population will be over 60 in 2030, compared with about 16 percent in 2015."

At the same time, the population aged between 15-59 will drop by 80 million by 2030. The overall population is expected to peak that year too, at 1.45 billion. In short, unless things change quickly, China will continue to get older and, in 13 years' time, less populous. The trouble with expecting China's demography to change much in the near future is that years of the one-child policy has changed the traditional Chinese attitude to children.

"'In traditional Chinese culture, more children meant more prosperity, so the traditional household would hope for more children, but the one-child policy has played a role in affecting that,' said Jieyu Liu, deputy director of the China Institute at London's School of Oriental and African Studies. 'This recent change to the one-child policy is mostly affecting urban populations,' she said. 'Since the 1980s, rural households were allowed to have a second child if their first was not a son. I think that after 36 years under the one-child policy, a lot of urban couples have already adapted into this one-child culture.'"

Not only is living in Chinese cities expensive, but low levels of parental leave and a lack of affordable healthcare makes a second child seem too expensive for many couples. Can the government change this reluctance to have another child?

"'The bottom line is that this is a very hard area to have any impact on. It's mostly about public attitudes,' Professor Kerry Brown, director of the Lau China Institute at London's King's College, told NBC News. 'Trying to have campaigns encouraging people to have bigger families, it's very limited what you can do,' he said. 'The economic constraints on people in China are very great. It'll probably have a very limited impact, whatever the government does. It's about creating the right mood music as it were.'"

It's one thing to force people not to have children - but forcing them to have children? That surely is beyond the power of the Chinese Communist Party. But maybe I should not give them any ideas…