The Chinese government recently made a major adjustment to its family planning policy, fully implementing a “three-child” policy to address the growing problem of an aging population and to maintain the role of the demographic dividend in China’s economic development. Analysts say that in order to gradually mitigate the declining birth rate, the Chinese government must introduce policies and supporting measures to encourage childbirth, but it will take at least a few decades to eliminate the ill effects of the past 40 years of “one-child” family planning.
New policies target aging and labor shortages
The Chinese government made a major change to family planning on May 31, introducing a policy of liberalizing the “three-child” policy. After the Chinese Communist Party was established in 1949, there were two fertility peaks from the 1950s to the early 1960s and from the 1960s to the early 1970s, providing a much-needed demographic dividend for economic construction. However, due to the low level of economic development at the time, it was difficult to sustain the excessive population growth, and the Chinese government gradually tightened its fertility policy, starting with family planning in the 1970s and formalizing it as a basic state policy in the 1980s and enshrining it in the Constitution.
However, after more than 40 years of forced implementation of the “one-child” policy and various problems, especially the gradual disappearance of the demographic dividend, the Chinese government began to fully liberalize the two-child policy in 2016. This time, it further fully liberalized the “three children” policy on top of the proposed increase in the statutory retirement age, hoping to slow down the pace of population aging and solve the labor shortage problem through a “two-pronged” strategy.
The fact that China’s population is aging and the number of births is declining significantly is verified by the data from China’s seventh census. The data show that by the end of 2020, 18.7% of the population was over 60 years old, up from 13.3% 10 years ago, and 13.5% were over 65 years old. 12 million people will be born in 2020, down 2.65 million or about 18% from 14.65 million in 2019, the fourth consecutive year of decline.
Some analysts say that if the Chinese government’s theoretical scenario is followed, after liberalizing the “three-child” policy, China’s future births will increase year by year from 12 million last year to at least 24 million, i.e., from last year’s total fertility rate (average fertility rate) of 1.3 to 2.6 (still below the total fertility rate of about 3), and If this fertility rate is maintained, both the aging and labor force problems will be solved.
A total fertility rate of 1.3 is considered low. A total fertility rate of 1.5 is considered a “highly sensitive threshold” and a decline below 1.5 signals the possibility of falling into a “low-fertility trap. It is generally believed that a total fertility rate of 2.1 is necessary to ensure that the total population of the next generation does not increase or decrease.
Preventing Excessive Decline Rather Than Raising
Some observers argue that the Chinese government’s hope to solve the problems of aging and labor shortages by relaxing family planning policies is an unrealistic and fanciful idea.
Yi Fuxian, a senior researcher at the University of Wisconsin-Madison and author of “Rethinking China’s Family Planning Policy,” a demographic treatise entitled “The Empty Nest of the Great Nation,” says that the liberalization of the “three-child” policy could result in the creation of more than 200,000 new The “three-child” policy will likely result in more than 200,000 new children. However, China will have 9.87 million fewer first marriages in 2019 than in 2013 (23.86-13.99), and a sharp drop of 5.88 million marriages between the ages of 20-24 in 2019 than in 2011 (9.53-365), which means that the birth rate of one and two children in China will drop significantly in the next few years.
China’s fertility is not a question of how to boost it, but how to prevent its excessive decline,” he said. The three children themselves may increase by 200,000 or so, but the one and two children are going to decline by millions every year.”
Another reason for China’s declining birth rate is the rising divorce rate, Yi said. China’s divorce rate is 3.4 per 1,000, Japan’s is 1.7, and Taiwan and South Korea’s is 2.3, he said. Faced with fewer marriages and more divorces, China’s birth rate will only continue to decline, not increase.
However, some analysts believe that the Chinese government’s vigorous promotion of the “three-child” policy has something to do with the sharp decline in China’s economic growth in 2019, which is approaching 6%. China’s reform in the early stages of economic development of the troika (investment, exports and consumption) benefits weakened, the new troika (health care, education and pension) is controversial, must find another way to find a new engine of economic development. The analysis says that if all women of childbearing age can have three children, it can drive the increase in demand for products and services of related industries to a certain extent.
The pulling effect is limited, and the burden is bound to increase
The median cost of raising a child in China (from pregnancy, childbirth, raising to the age of 18), according to public data compiled by Suning Financial Research Institute, including the 10 highest cost cities such as Beijing, Shanghai and Shenzhen, is 100,000 yuan per child per year, reducing the population of 2.65 million newborns correspondingly to a reduction of nearly 270 billion in various consumption. (According to China’s seventh census, the number of births in China in 2020 is 2.65 million less than in 2019.) If the fertility rate of China’s population doubles from the current 1.3 to 2.6, or 12 million more, at a median of 100,000 yuan, this would drive more than 1.2 trillion yuan in various consumptions per year. China’s gross domestic product last year was 101.6 trillion yuan.
Xie Tian, chair professor at the University of South Carolina Aiken School of Business, said that while the extra births will inevitably increase demand for related industries, such as infant and child education and health care. But rather than boosting the economy, having more children will add to the burden on families, including grandparent families, and the more children born, the heavier the burden.
These are not economic growth points, they don’t drive the economy, they just add to the burden of these people,” he said. If you have to spend more money to raise a child, to go to kindergarten, to go to elementary school, to go to tuition classes, you will spend less in other areas.”
In an exclusive interview with Xinhua, the head of China’s National Health Commission said that China will coordinate planning, organize the implementation of a three-child birth policy in accordance with the law, consider marriage, childbirth, upbringing and education as one, and combat bad social customs such as bad marriage practices and overpriced bride price. At the same time, develop a system of inclusive childcare services, reduce family education expenses, improve the maternity leave and maternity insurance system, and strengthen tax and housing support policies.
Observers point out that even after the liberalization of “two children” a few years ago, many young people do not consider having “two children,” especially those living in large and medium-sized cities with high economic development and high costs of living such as housing and education, in addition to bearing the burden of housing, child care, medical insurance, living expenses and huge amounts of money. In addition to the pressure of housing, child care, health insurance, living expenses and a huge mortgage, both couples are only child to take care of four elderly, raising a child has made them financially overstretched, in physical and energy overwhelmed. The addition of two and three children is tantamount to putting a ring of “chains” around their necks and a “mountain” on their heads.
The “trilemma” is like three heavy mountains
The Communist Party’s totalitarian system is best at enforcing mandatory family planning through so-called legal and administrative means, but encouraging childbirth is precisely what it is least good at, because it requires huge financial outlays to support it and faces many challenges that need to be solved, said Yi Fu-hsien, a senior researcher at the University of Wisconsin-Madison.
He said, “The first is that they can’t afford it; the second is that they don’t want to have it; the third is that they can’t.”
In response to the “can’t afford” problem, Yi suggested increasing the employment rate of young people, especially young men, because a stable income is a guarantee for them to get married and have children. In addition, the cost of health care, education and childcare subsidies should be reduced, and the proportion of income from work in GDP should be increased. As for the problem of “reluctance to have children,” Yi suggests that in addition to promoting the traditional Chinese family values, the Chinese social security system should be reformed to advocate a family-based system, with one spouse paying taxes so that both can enjoy social security pensions. On the issue of “not being able to have children,” Yi suggested reforming the education system, shortening the school year in schools and universities, and reducing the difficulties of pregnancy and childbirth caused by marrying too late and being too old.
Yi said that China’s compulsory family planning over the past decades has changed people’s perception of fertility, and that China’s entire economic and social pattern is planned around the “mainstream family” (parents with one child), which will be difficult to change even if the family planning policy is stopped.
The whole fertility decline is a global crisis,” he says. Even without family planning, fertility will decline. Fertility decline is like a rock on a hill that would have rolled down slowly. China’s family planning policy has caused us to kick the rock off the mountain. We have the fastest fertility decline in the world, and we are getting old before we get rich. It’s very easy to roll a rock down a mountain with one kick. But to lift huge rocks up from a cliff, that’s very difficult, very difficult.”
Activists accuse government of being “womb police”
In an interview with the Voice of America, Ms. Reggie Littlejohn, president of Feminists Without Borders USA, said that China appears to have relaxed its family planning policies, but in reality Chinese authorities still control women’s rights to pregnancy and childbirth.
At the end of the day, the CCP is still in control of women’s lives, acting as the ‘womb police,'” she said. If a woman gets pregnant outside of the policy, she is forced to have an abortion. Also more importantly, if you get pregnant out of wedlock, you will still be forced to have an abortion. China needs to abolish all forced abortions and sterilizations.”
Ruijie said that both the previous “one-child” policy and the current “three-child” policy violate the basic human rights of citizens. She said that the CCP imposes its will on the most intimate and private decisions of couples, and that the decision to have children or not, and how many children to have, is a decision to be made between couples, not by the CCP. Ruijie calls on China to fully abolish its family planning policy and allow couples to have children according to their wishes and conditions. What the government should do is to introduce measures from education and health care to encourage couples to have more children.
Yi said China’s family planning system is like a bucket full of holes, and it is not enough to mend just one of the shortcomings. He said, “China’s decades of family planning have led to a porous demographic structure, and it would be a fraud to rely on a single Chinese medicine to cure it. Decades of chronic diseases, to be cured by a pair of Chinese medicine, that is unrealistic.”
Yi said that China’s current demographic problems are the evil consequences of the family planning policy in the past decades, and it will take decades to solve each problem and raise the fertility rate. If the Chinese government can explore some ways to encourage fertility without violating human rights, it will be a good experience for the whole world as well.