Stop China from Ageing: Two-Child Policy

13 June 2018

YES, CHINA IS AGEING. The population of China will reach roughly 1.45 billion by 2030 from 1.3 billion now. It is forecasted that over a quarter of the population will be age 65 or above by 2030 giving rise to a drastic shrink in the size of national labour force which will greatly hinder the growth of China’s economy in the long run. This imminent problem is attributed by the one-child policy implemented by the government of the People’s Republic of China in an attempt to combat rapid expansion of population between 1949 – 1979 when healthcare and medical attention became more easily accessible by general public, including those in rural areas. In the hope of alleviating the ageing issue, China has loosened its one child policy to now allow families to have two children – the two-child policy.

The one-child policy was introduced in 1970s to mitigate economic problems such as shortages of food and housing caused by rapid expansion of population. This mandatory rule was strictly enforced across the country, especially in the urban areas, where families who had flouted the rule would be heavily fined. The one child policy had always been a controversial topic not only  for its constraint on reproductive freedom which most consider as basic human right, but also for  its enormous impact socially and economically. After 30 years of implementation, socio- economic issues have started to emerge, just as many had anticipated. The work force has shrunk massively and expected to shrink continuously, attributed to the immense demographic imbalance between the old and young, threatening economic growth. In addition, China’s youngest generation who were born under the one child policy will be left having to provide support for his or her two parents as well as four grandparents, posing significant financial pressure on them.

It’s apparent that immigration would not be the preferred solution to the economic problem due to the tough foreign policy China had long adopted. Resorting to two child policy would seem more probable and feasible.  With the new policy, effective from 1st January 2016, about 90 million women have become eligible to have a second child. However, apathy of the general public towards the new policy is observed from the low birth rate in 2016 and 2017. Chinese women gave birth to 17.2 million babies in 2015 but the number dropped by 3.5% in 2016 where there were only 1.31 million newborns more than the previous year. The figure falls short of what the government predicted which is 2.5 million, with the birth rate continuing to decline in 2017.

Baby boom was surely expected but it did not happen. What went wrong? The one child policy had somewhat undermined the Confucian patriarchal tradition in the Chinese society where women, being the only child, has been exclusively invested with family resources to receive education and later on join the work force. Women have gradually departed from their former role of primary caretakers of the family. However, long working hours and high living costs leave most women no choice but to settle with only one child or even none in order to stay in their jobs. Gender discrimination against women further discouraged them from having child; a survey found that 33 percent of female workers had their pay cut after giving birth and 36 percent of them were demoted. Coupled with the lack of institutional support such as paid maternity leave, affordable child care as well as healthcare, the birth rate continues to fall. The ageing problem will not be solved unless the government commits to provide sufficient incentives such as tax concessions, affordable childcare and health care as well as adequate protection of women from gender discrimination at work.'

Authored by Yanyi Choy                                                              Manager, Business Development, Corporate & Private Clients, Vistra Hong Kong