The China Research Development Foundation has caused a fury of media speculation with a leak of its recommendations on changing China’s one-child policy. This is the newest proposal added to the clamour for change to the three-decade old policy. As a think-tank of the Development Research Centre, which is under the State Council of the PRC, the CRDF recommends an immediate change to a two-child-per-family limit, and then an elimination of all limits over the next decade. The principal reason cited by the CRDF and most supporters of these changes is China’s aging population, often referred to as China’s aging population time bomb. Two statistics used to “prove” China will age before it becomes wealthy underlie this concern:
1) The current fertility rate in China of 1.5 to 1.6 is well below the established replacement level of 2.1;
2) More than 25% of the population will be over 65 in 2050.
The idea that amending or eliminating China’s one child policy will improve China’s economic demographics is fundamentally flawed. The flaw stems from the assumption that China’s growth and development will follow a path similar to Western nations. This assumption is derived from two culturally biased “facts”. The first is China will be stuck in economic transition, unable to finish its development because there will be a shrinking percentage of new workers entering the marketplace. The second is that this diminished workforce will be unable to support the growing number of retirees over the next several decades. Both these ideas transplant problems from the West into a nation that has thus far followed a unique and unprecedented path of development.
Before looking more closely at the impact changes to the one-child policy may have, these assumptions surrounding China’s aging population must be addressed. Currently wage inflation is not a major concern and is in fact lagging far behind cost-of-living inflation. If a labour crisis were imminent we would expect to see greater wage inflation due to a demand for workers. In addition, if there were a shortage of new workers entering the workforce we should see workers over 60 typically being utilised in jobs better suited to younger workers. In fact, the mandatory retirement age is still 55 for women and 60 for men. In many smaller cities and the countryside woman can be forcibly retired as early as 45 and men 52.
Over the last several years 50% of higher education graduates in China have been unable to find any work. Many graduates are forced to take jobs they are considerably over qualified for and/or leave their chosen fields of study. Moreover, many of the working poor survive at jobs such as cleaning the streets, menial construction, security, and dozens of job types obsolete in most nations. All of these facts demonstrate an on the ground reality vastly different than portrayed in the media: There is no immediate or pending labour crisis facing China because of its aging population. Actually, China should continue to allow its population to contract, which will allow the disparity in skills and jobs to balance out via a shrinking workforce.
In China there is no nationalised Social Security system such as we are accustomed to in the US and Europe. Retirement benefits are paid out and collected at the local level. This is itself a new development as many current retirees are actually supported 100% by their previous corporations with no “government” input. On top of these benefits more than 70% of Chinese families individually save for their retirement. Finally, social expectations and law demand that adult children support their elderly parents. Often after retirement these parents either live with their children or in housing provided by them. The reality of China’s retirement and cultural support system means there is not a direct corollary between declining workers and unsustainable old age benefits.
Even in the unlikely event China follows the West in how its aging population impacts the economy, changes to the one-child policy are not a silver bullet for these demographic issues. Any discussion of the policy must examine its details, which show it has never been as rigid as reported in the Western media. It was never a strict one-child per family rule and has been amended several times to provide further flexibility. Five key areas of flexibility allowed in the current policy include:
1) Anyone may have a second child after 10 years;
2) All minorities (nine percent of the population) may have two children and sometimes are allowed more;
3) A couple with both parents from one-child families may have two kids;
4) Anyone may pay the income-progressive fine and have a second child.
5) In much of the countryside, families are allowed a second child if the first is a female.
Considering these allowances, “one-child” does not adequately describe the policy. With all the areas of greater flexibility more than half those in prime child-rearing years are eligible to have a second child. If many corporations didn’t enforce their own inflexible one-child policies, and the fine was not such an inhibiting factor, the number could well approach 100%. The idea that relaxing or eliminating this “one-child sometimes but not all the time” policy will fix China’s aging population bomb is an illusion.
Given the current green light, it would be assumed many urban middle class dual-single child couples would choose to have a second child. Yet the urban fertility rate remains the lowest in China, with the vast majority of couples willingly choosing to remain single child families. The cost and stress of child rearing create an atmosphere where most middle-class Chinese will refrain from having this additional offspring. Opening the door to all urban families to have a second child will not create the anticipated surge in births. For this to happen, couples must see a significant change in salary, living costs, and stress levels associated with modern urban life.
Another key area of consideration is the assumption that urban families will be the most likely to take advantage of these loosened restrictions. Depending on who is counting, the rural population is between 600 to 700 million; of this, several hundred million hover at the international poverty line. In addition, there are easily over 100 million urban poor also hovering at the international poverty line. In this portion of the population, families are inclined to seek economic advancement through the support of a greater number of wage earners. Making them the likeliest to take advantage of relaxed or eliminated childbirth limits. Because of this any changes to the one-child policy are likely to add a further burden onto the poor, and lock them in a cycle of poverty.
Loosening China’s one-child policy is premature. There is little to no evidence China will follow the West in how it’s aging population impacts economic development. I can say from experience allowing two-children for every family would provide a huge improvement in how children are raised and how they interact with their environment. Effectively eliminating the little prince and princess syndrome. However, these improvements in child rearing environment do not overshadow the damage an ill-planned and untimely change to the policy would cause.
In China, and most countries, no one policy can be looked at or understood in a vacuum, too many other factors are important to consider. Changing the one-child policy without fully weighing all other factors and possible outcomes would be disastrous. The incoming leadership would do best to consider the China Research Development Foundation’s recommendation only as part of a larger group of proposed policy changes. Combined with overall changes to the Hukou system, education, healthcare, worker rights, and living costs, a cautious change to the childbirth policy would have a positive impact.Originally Posted at filterpret.com
- And then there were two: China moves to ease one child policy (crikey.com.au)
- China think tank urges gov’t to end 1-child policy (news.yahoo.com)
- One child enough? China weighs ending policy (behindthewall.nbcnews.com)
- China Needs to Ease One-Child Policy, State Researchers Say (chinadailymail.com)