China eased its decades-old one-child per family policy on Thursday and will now allow couples to have more children, according to the state news agency Xinhua. But the shift will likely be too little too late to reverse the economic slumping prospects.
For four decades, China’s booming economy has been served by more and more workers every year. That’s due to change as working-age population declines due to years of sharply declining birth rates. As Feng Wang of the Brookings Institution put it, “The era of uninterrupted supplies of young, cheap Chinese labor is over.”
In order to combat a projected decrease in working-aged people, China has opted to loosen its now infamous policies restricting the number of children families can have to one. But for a whole slew of reasons, that shift probably won’t be enough to slow the country’s economic decline.
Population Decline
China would have to raise its birthrate to 2.1 children per woman, from 1.4 where it currently stands, to offset its demographic decline. (The rate is higher than one child per woman because ethnic minorities are already allowed to have two children, as are people in rural areas whose first child is a girl. Some couples have also paid steep fines to get around the regulation.) Even if that happens, it’ll be years before the babies born after the policy shift enter the workforce. Until then, the workforce — defined by the Chinese government as people between the ages of 16 and 59 — has shrunk for the past three years in a row. Without this policy change, China’s working population could have fallen by a whopping 61 million by 2030, according to estimates by the United Nations.
Gender Imbalance
“Our country has the most serious gender imbalance that is most prolonged and affecting the most number of people,” the Chinese National Health and Family Planning Commission said earlier this year. China has one of the highest gender imbalances in the world with nearly 50 million more men than women. The one-child policy is one of the main culprits behind selective abortion and female infanticide in the country, since couples prefer to have a male child over a female if they can only have one.
The imbalance has led to a premium on Chinese women when it comes time to settle down. As a consequence, marriage costs have stretched beyond the means of many Chinese people. That might further push down birth rates since 30 to 50 million Chinese men will not be able to find female partners in China over the next two decades.
Changing Society
[T]he Chinese seem to be content with one child.
China has eased its one-child policy before. In 2013, the government allowed 11 million couples to apply for permission to have a second child. Although there was a lot of speculation about a resulting baby boom, less than 3 percent applied to have another kid. That’s partly because it’s become prohibitively expensive for Chinese couples to expand their families. Raising a child costs about $3,700 a year — which is equivalent to 43 percent of the average household income. So with the economy growing at its weakest pace since 1990, many might be wary of making an investment into a second child.
There are, of course, more human considerations as well.
“[T]he Chinese seem to be content with one child,” Dai Qing, a Beijing-based investigative journalist, wrote in an op-ed for the New York Times. “Apparently, many young urbanites no longer agree with the traditional view that ‘duo zi duo fu’ or ‘the more children (sons) a couple have, the happier and more secure they are.’ They see big families as a hindrance to their dreams of living an affluent middle class life.”