According to some estimates cited by ‘All Girls Allowed’- By 2050, China’s population will be declining by 20 million every five years, and one out of four people will be over the age of 65. China’s elderly population is 11% of the population today; by 2050, it will be 31% of the population if the trend is not reversed. Mind boggling figures indeed!!!
But how did this all begin?
In the early 1950s the Chinese government believed that economic growth could be stimulated by ensuring a large workforce. Hence Mao Tse-Tung(a Chinese communist revolutionary and the founding father of the People’s Republic of China) urged his people to have lots of children to strengthen the country. Later in 1970s, the government realised the potential damage their stance could have on the economy, they feared that the country won’t be able to feed its population (as Malthus feared that the entire human civilisation would collapse because resources grow slower than population growth) and hence in 1979 the government implemented the one child policy i.e. a strict “family-planning policy” The goal of this policy was to keep China’s population below 1.3 billion by the year 2000, but now the government has again taken a U turn (easing of one child policy) as it has been building a stock of oldies. In macroeconomic terms, China has accumulated an unintended inventory of senior citizens, which now it needs to manage. The impact of the policy led the Chinese economy to a position that wasn’t expected by the government.
The most important implication of the policy is to realise that the policy threatens to harm the very stability of the nation because of a segment of the Chinese population that is elderly is growing at a faster rate than previous years.; which has led to the 4-2-1 phenomenon in the Chinese economy i.e., when the child reaches working age, he or she would have to care for two parents and four grandparents in retirement, which puts a lot of pressure on the child from the very tender age to excel in life and earn a living. Moreover, the country’s ageing population will reduce the available labour pool, putting pressure on wages and inflation, and fewer workers would be taking care of a growing elderly population, eventually creating a pension shortfall and exacerbating elderly care issues, adding to greater pressure on GDP growth too!
The most disturbing aspect is that like in all Asian economies, even in the Chinese society baby boys are more valued than baby girls because boys carry on the ancestral name, inheritance laws pass property on to sons, and sons are responsible for taking care of aged parents. (Oh and the best part is, to see the ill effects we do no need to go very far…look at India for that which is the best example in order to understand this; a country which has marginalised a substantial portion of its population) Because of this many couples abandon a baby girl as well as handicapped babies in public places. The traditional preference for boys has also led to couples opting for sex-selective abortions. Moreover according to the Rights groups the law has meant some women being coerced into abortions, which Beijing denies. In 2008, the last year in which abortion numbers were made available, 13 million abortions were done, according to the state-run China Daily newspaper. All Girls Allowed, a group that opposes forced abortions in China, estimates that 10% of all abortions in China are forced. This has led to a disturbing and skewed sex ratio.
Moreover, many companies manufacturing or operating in China have already seen their profits diminish as the supply of labor—seen as China’s most competitive advantage in attracting foreign companies to its turf—tightens, pushing up wages.
In order to remedy this, the changes to the one-child policy and labor camps were part of a key policy document released by the official Xinhua News Agency following a four-day meeting of party leaders in Beijing. China is loosening its decades-old one-child policy by allowing two children for families with one parent who was an only child.
China is seen as the emerging new power with high and sustained potential growth rates. It has even regarded as the hub of manufacturing, which is slated to overshadow the US in a few years from now. In such a scenario, the government think tank urged China’s leaders to start phasing out the policy completely, in order to sustain this growth. However, till now there has been only a partial easing of the policy. Moreover, there are views that this measure would be inadequate to return to the normal trajectory of population growth and may not have much of an impact as people think living in the cities is expensive. Children expected to be born as a result of the policy shift will add modest growth—1 million to 2 million births over the next three years, population experts estimate. Moreover, if a significant number of women do decide to have more children, it may create a labor shortage in the short run as women leave the workplace to care for the children. As China’s economy strengthens, it will likely follow the path of Europe and the United States, where women following careers have fewer children and wait longer to have them.
In the initial stages, China’s policy was appreciated by various academicians on the account of being a powerful tool to control population; as China’s population has seen a steep decline in the numbers (for the reasons well mentioned above). Many great minds of the country favoured adopting such a policy for India neglecting the cause of the decline and just superficially analysing its outcome. Various economists believe that even after easing this restriction, the growth rate may still be far below than needed, which is a strong message and indication for the government that taking a U turn is not as easy and its impact may have a strong implication on the overall development of the country’s social and economic parameters even long after the policy has been reversed.