Chinese demographics

The big news of the week is that China’s one-child policy is being relaxed. After 34 years when most Chinese families were officially limited to only one child, most couples will now be allowed to have two children. The reality, however, is that it will make very little difference.

It will make little difference because only about one-third of Chinese couples were still living under those restrictions anyway. The one-child limit never applied to ethnic minorities, and in the past fifteen years it has rarely applied to people living in rural areas either: couples whose first child was a girl are almost always allowed to have a second child (in the hope that it will be a boy).

Controls were stricter in the cities, but if both prospective parents were only children themselves they were exempt from the limit. And people with enough money can just ignore the rules: the penalty for having a second child is just a stiff fine up front and the extra cost of raising a child who is not entitled to free education. (The fines are reported to have raised $2.12 billion for the state coffers last year alone.)

The net result of all this is that the China’s current fertility rate (the average number of children a woman will bear in a lifetime) is not 1.0, as it would be if there were a really strict one-child policy. According to United Nations statistics, it is 1.55, about the same as Canada. Which suggests that most Chinese who really wanted a second child got one.

The new rules that have just been announced by the Third Plenum of the Communist Party say that urban people can now have a legal second child if just one of the would-be parents was an only child. This is not going to unleash a wave of extra babies; it will raise the fertility rate, at most, to 1.6. (“Replacement” level is 2.1.) Indeed, it’s questionable whether the one-child policy really held down China’s birth rate at all.

There are demographers who argue that the one-child policy hasn’t really made much difference. China was already urbanising fast when the policy was imposed in 1979, and the more urban a country is, the lower the birth rate. From about 1970 there was also a very aggressive birth control policy.

The fertility rate in China had already dropped from 5.8 children per woman in 1970 to only 2.7 in 1978, the year before the one-child rule was introduced. It has since fallen to 1.55, but that might well have happened anyway. For comparison, Brazil’s fertility rate has dropped from 6.0 fifty years ago to 1.7 now WITHOUT a one-child policy.

China’s National Population and Family Planning Commission claims that the one-child policy has spared the country an extra 400 million mouths to feed, but it would say that, wouldn’t it? The real number of births avoided by that policy is probably no more than 100 million in three decades. And if we accept these numbers, then three major conclusions follow.

The first is that the one-child policy is not the major culprit in China’s disastrous gender imbalance, with at least 120 boys born for every 100 girls. The social effects of this are very dangerous: by the end of this decade there will be 24 million “leftover” men who will never find a wife.

Any sane government would be terrified by the prospect of a huge army of unattached and dissatisfied young men hanging around the streets after work with nothing much to do. A regime with as little legitimacy as the Communists will be even more frightened by it. Unfortunately for them, ending the one-child policy will have little effect on this pattern.

Only state intervention as arbitrary and intrusive as the one-child policy could reverse the gender imbalance, and it is doubtful that the Communist regime is still confident enough to risk that degree of unpopularity.

The second conclusion we can draw from these statistics is that China’s population is going to drop whether the regime wants it or not. It will peak at or below 1.4 billion, possibly as soon as 2017, and then begin a long decline that will see it fall to 1.2 billion by 2050.

There’s nothing wrong with that in principle, but it exacerbates what is already the greatest threat to economic growth in China: the population’s rapidly rising average age. The big, old generations will be around for a long time, but the younger generations are getting smaller very fast. Indeed, the number of people in the 20-24 age group in China will halve in the next ten years.

This means the dependency rate is going to skyrocket. In 1975, there were 7.7 people in the workforce for every person over sixty: by 2050, the ratio will be only 1.6 employed persons for every retiree.

No country has ever had to bear such a burden before, but ending the one-child policy won’t get the birth rate back up. The only way China could increase its workforce to lessen the burden is to open up the country to mass immigration. And what are the odds on that?