On October 29th 2015, China loosened its “One Child Policy,”[i] allowing all families to have up to two children. This follows an earlier relaxation in 2013, where China allowed those without siblings to themselves have up to two children.[ii]
Beijing cited “the challenge of an ageing population”[iii] as the reason for this relaxation. China faces a looming demographic crisis, as more and more of its population ages out of the workforce with fewer people to replace them. China’s fertility rate is currently 1.7 births per woman, compared to a replacement rate of 2.1 births per woman.[iv]
These changing demographics present several long-term issues. First, wages are rising as fewer young people enter the workforce,[v] which affects a manufacturing model that used to be based on cheap labor. Second, China is rapidly aging. China’s population has “aged” in only forty years, compared to a hundred years in other developed countries.[vi] This presents a dilemma for Beijing, which has been able to rely on traditional family structures to save on spending for elderly care. Currently Beijing only supports about 1.6% of its elderly.[vii] Beijing must either leave its working population to support a growing elderly population, or spend much more on public services.
Finally, the “One-Child Policy” has led to a serious gender imbalance, leading to about thirty million surplus men.[viii] Some worry that these surplus men will pose security risks, such as an increase in crime,[ix] but some economic effects have already started to surface. For example, some economists estimate that a part of China’s increasing housing prices is due to “surplus” men paying for apartments to make them more attractive partners.[x]
Thus, a relaxation of the One-Child Policy was likely inevitable. Beijing instituted the One-Child Policy in 1979 in response to worries about population growth and food shortages;[xi] thus, there was little reason not to alter the policy once conditions changed.
However, Beijing’s change may be too late to have much of an effect on demographics. It is also well-established that as a country’s income increases, its fertility rate decreases. Having a child is now an expensive proposition for Chinese families, as the cost of raising an additional child to the age of eighteen has been estimated at almost 500,000 yuan (5,000,000 INR or US$78,000).[xii] The “One-Child Policy” is partly to blame: as parents only have “one shot,” there is high demand for anything—education, property, healthcare, and so on—that would help their only child succeed.
This is not to say that the “One-Child Policy” will have no effect. However, there is a significant possibility that China’s relaxation of this policy will have a smaller effect than people expect.
What does this change in China’s policy mean for India? India is predicted to surpass China as the world’s most populous country by 2022.[xiii] India’s working population will continue to grow, giving it a resource that the economy can rely upon as it continues to develop. In contrast, China is facing a decreasing working population before it has fully developed.
India does have issues with overpopulation. The Indian government is already struggling with providing adequate social support for its current population; a growing population means more people that need access to food, clean water, electricity, and social services like education and healthcare. In addition, a growing population also means a greater environmental impact, both in terms of direct environmental damage and pollution, and in terms of carbon emissions.
However, the issue of overpopulation may correct itself. India’s fertility rate in 1960 was 5.87 births per woman; the rate has now more than halved to 2.85 births per woman.[xiv] This decline has even been seen amongst the poor, who generally have higher fertility rates than the middle- and upper-classes. Current predictions expect India to reach replacement rate in 2020,[xv] and so India’s population will eventually stabilize.
China and India thus represent two possible answers to the question of overpopulation. China’s One-Child Policy has succeeded in limiting population growth very quickly, but has warped its demographics to a large degree. India, on the other hand, has seen its population growth rate adjust naturally (helped by noncoercive family planning policies), and thus avoided these demographic distortions. China may have done many things right—especially compared to India—but in this particular case, India may have made the right decision.
Nicholas Gordon is a researcher at the Global Institute for Tomorrow in Hong Kong. He was a research intern at Gateway House in the summer of 2014. The views expressed here are his own.
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[i]Guardian, China abandons One-Child Policy, 29 October 2015, <http://www.theguardian.com/world/2015/oct/29/china-abandons-one-child-policy>
[ii] The New York Times, China to ease longtime policy of 1-Child limit, 16 November 2013, <http://www.nytimes.com/2013/11/16/world/asia/china-to-loosen-its-one-child-policy.html>
[iii] Xinhua, China to allow two children for all couples, 29 October 2015, <http://news.xinhuanet.com/english/2015-10/29/c_134763645.htm>
[iv] World Bank, Fertility rate, total (births per woman), <http://data.worldbank.org/indicator/SP.DYN.TFRT.IN>
[v] China Labor Bulletin, Wages and employment, <http://www.clb.org.hk/en/content/wages-china>
[vi] World Bank, The Elderly and Old Age Support in Rural China, 2012 <https://openknowledge.worldbank.org/bitstream/handle/10986/2249/675220PUB0EPI0067882B09780821386859.pdf?sequence=1>
[vii] China Business Review, Senior Care in China: Challenges and Opportunities, <http://www.chinabusinessreview.com/senior-care-in-china-challenges-and-opportunities/>
[viii] The Guardian, China’s brutal one-child policy shaped how millions lived, loved and died, 1 November 2015, <http://www.theguardian.com/commentisfree/2015/nov/01/china-one-child-policy>
[ix] The Washington Post, The security risks of China’s abnormal demographics, 30 April 2014, <https://www.washingtonpost.com/news/monkey-cage/wp/2014/04/30/the-security-risks-of-chinas-abnormal-demographics/>
[x] The Guardian, China’s brutal one-child policy shaped how millions lived, loved and died, 1 November 2015, <http://www.theguardian.com/commentisfree/2015/nov/01/china-one-child-policy>
[xi] Time, Here’s how China’s one-child policy started in the first place, 29 October 2015, <http://time.com/4092689/china-one-child-policy-history/>
[xii] Bloomberg, The new Chinese birth control: sky high costs of raising kids, 8 November 2015, <http://www.bloomberg.com/news/articles/2015-11-08/the-new-chinese-birth-control-sky-high-costs-of-raising-kids>
[xiii] The New York Times, India will be the most populous contry sooner than thought says UN. 30 July 2015, <http://www.nytimes.com/2015/07/30/world/asia/india-will-be-most-populous-country-sooner-than-thought-un-says.html>
[xiv] Index Mundi, India fertility rate, <http://www.indexmundi.com/facts/india/fertility-rate>
[xv] The Hindu, India top reach replacement levels of fertility by 2020, 23 December 2014, <http://www.thehindu.com/data/india-to-reach-replacement-levels-of-fertility-by-2020/article6717297.ece>