Don’t bank on a baby boom in China

“Later, longer, fewer” – under this slogan Mao Zedong initiated a population growth target in China more than 40 years ago. It was part of a catalogue of goals set within the five-year plan, when the total population had just passed the mark of 800 million people in 1969. People should marry later, leave longer periods between pregnancies and have fewer children. Now it appears that the policy’s days are numbered.


 

In 1980, the “one-child policy” was officially implemented. Initially it was described as a temporary measure meant to last for a single generation. In the following thirty years, China’s fertility rate dropped rapidly from to 5.5 in 1970 to 1.7 in 2011 – well below the population replacement rate of 2.1 children per woman.
 

This has led to concerns among experts and officials over the possible economic and social effects of the policy. Official statistics last year showed that China’s labor force shrank for the first time. Although by 2030, China’s population is expected to be bigger than 1.4 billion people, it is projected to face a labor shortage of 137 million workers, according to the International Monetary Fund (IMF). Many are also worried by the country’s growing population above retirement age, as well as a widening gender imbalance driven by a traditional preference for male offspring.

Don’t bank on a baby boom in China

Official statistics last year showed that China’s labor force shrank for the first time. Although by 2030, China’s population is expected to be bigger than 1.4 billion people, it is projected to face a labor shortage of 137 million workers, according to the International Monetary Fund (IMF).

Young Chinese see large family as unnecessary burden
 

In mid-November, China’s state-run Xinhua News Agency announced that the government would move towards a policy allowing couples in which either parent is an only child to have two children. This change will probably first of all be relevant for people living in cities, in particular in places such as Shanghai and Hangzhou on the prosperous eastern coast.
 

“Thirty years of the one-child policy means nearly all people in the current childbearing generation in the cities are only children, so the vast majority of couples will be able to have two children – if they want them,” says Brigitte Miksa, head of International Pensions, a research and publication unit of Allianz specializing in demographics, finance and retirement.
 

After being tested in the urban laboratory, reforms could be extended to rural areas, home to 651 million people, nearly half of China’s population. Yet, even if the one-child policy is liberalized, questions remain as to whether it would be enough to reverse current population trends.
 

“Research indicates that two-thirds of couples say they want two children. However, since 2007, authorities have maintained that the strict one-child policy has only applied to less than 40 percent of the population. There were exemptions for such groups as rural couples and minorities and a lot of the people entitled to have two children have so far chosen not to have two children,” Miksa explains. “It is by no means a foregone conclusion that the relaxation of the one-child policy in affluent cities, where preference for smaller families is solidly established, will result in a baby boom.”
 

Like counterparts across Asia, such as in Singapore, South Korea and Macao, where fertility rates are among the world’s lowest, young Chinese couples increasingly see large families as an unnecessary burden on both finances and time. Even so, it is unlikely that China’s government would move beyond relaxing the current policy to eliminating all restrictions on childbearing.

“There is, I think, a prejudice among many that rural populations will just have lots of children if the policies are completely relaxed. We know from numerous surveys, however, that a majority of rural couples also want to limit their childbearing for similar reasons to their urban counterparts,” notes Stuart Basten, lecturer in social policy at the University of Oxford. While projections suggest a sudden end to population control would lead to only a gradual increase in fertility, enough uncertainty remains to keep China’s leaders cautious.
 

Plenty of work left for family planning administrators
 

There are also bureaucratic barriers in the way of reform. Over the past thirty years, a massive officialdom has been established to impose family planning policy, with officials keeping tabs on the fertility of every neighbourhood and village. While the measures enforced were designed to be temporary, the sheer size of the organization will make it difficult to budge.
 

“There are many thousand with a strong vested interest in maintaining some form of status quo,” notes Basten. “This, I think, is a further reason why we will see piecemeal changes so that this army of administrators will still have things to do.”
 

And a de facto “two child policy” would still leave family planning administrators with plenty of work. In addition to enforcing limits on childbearing, officials are tasked with administering countless other regulations ranging from birth control to the amount of time couples must wait in between births.
 

So while the new policy may be cause for celebration among advocates of personal choice, and maybe of Chinese couples, it seems that China’s state control of reproduction is still here to stay.

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Petra Brandes
Allianz SE
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