China: large boost in baby numbers unlikely?

There has been speculation recently of China planning to end its law limiting the number of children families can have which is prompted by worries about the drastic future population ageing and shrinking work force built into the country’s population structure by its long history of strict family size restriction.

Starting in 1979, Chinese authorities imposed a coercive one-child per family limitation on most Chinese citizens. This was seen as necessary to limit future population growth to a manageable size. While a case could be made for some degree of population limitation, the demographically draconian nature of the one-child policy (apart from leading to widespread international criticisms over human-rights abuses) guaranteed the country major problems of structural population ageing in future decades.

That change in population structure is now well advanced and posing China with increasingly worrying economic, political and social difficulties. In an attempt to address the problem of rapid population ageing the government in late 2015 scrapped the one-child policy, allowing couples to now have two children.

This new policy led to an increase in birth numbers the following year, but this was short-lived, numbers in 2017 falling by over six hundred thousand. The failure of the two-child policy to produce the hoped for increase in births to slow down ageing lies behind the speculation that the policy will soon be abandoned and replaced with “independent fertility” giving couples freedom to decide how many children they have.

Anticipation of this change has seen some media pieces foreshadowing significant expansion in child-related business sectors (“China Considers Ending Birth Limits as Soon as This Year,” Bloomberg News, May 22, 2018). While introducing independent fertility might ostensibly raise expectations of substantially rising birth numbers there are equally good reasons for being less than confident this will actually occur, leaving the country with serious unresolved ageing problems.

A key factor behind this assessment is that one of the dimensions of the country’s rapid overall population ageing is a declining number of women of childbearing age (15 to 49 years). Over the past few years the number of women this age has fallen by around 5 million per year, with inevitable further large declines hot-wired into the demographic system over coming years.

United Nations projections (medium variant) published in 2017 for example, suggest Chinese childbearing-aged women will decline by close to 50 million in the space of the decade 2015-25. Unless this shrinking cohort substantially lifts its fertility rate, further falls in birth numbers are inevitable.

As well, within the childbearing span an increasing proportion are in the older (i.e. lower fecundity 35 to 49 years) upper section, and accordingly less likely to produce large families.

Biology aside, various surveys of desired fertility have shown many Chinese now do not want families of two or more children. With the country’s rapid economic development of recent decades career opportunities have become much greater for females and taking time out to have children is seen by many women as jeopardising their goals in that area.

In turn, many of today’s – and future – 15-49ers (i.e. potential parents) are themselves the only child of their own parents and hence have an affinity for that family structure. The benefits of parents pouring substantial resources into a single child rather than spreading them over several offspring is also a factor.

In tandem with this economic advancement the cost of raising children has risen substantially, especially in urban centres. An article in People’s Daily Online earlier this year for example, reported the annual cost of raising one child to be in the order of 20,000 to 30,000 yuan in major cities, beyond the means of many couples.

Rises in the overall cost of living, particularly housing, are another deterrent. Saving the money needed to get a house forces many to delay marrying and having a child. Reinforcing things, in the Chinese cultural setting childbearing outside marriage is not an option.

In short, significant success in lifting birth numbers is going to require very attractive incentives being provided by the government.