Bhaso Ndzendze — Researcher in International Political Economy

Can China’s Population Challenge Be Reversed?

Research Notes

Bhaso Ndzendze

6 January 2019

China, the country with the world’s second largest GDP, is seeing its population growth levels being bested by such war-torn and impoverished countries as Afghanistan, the Democratic Republic of the Congo, Iraq, and South Sudan. How things got here is something of a puzzle. But in some ways, the puzzle is non-existent if we consider that the same efficient government which brought about the transformative Reform and Opening Up policies which catapulted China into the position it currently occupies is also the same regime which efficiently put in place the measures which curtailed the population growth in the country. But this is only part of the complete picture. To grasp the full story of the current situation in China, which is likely to see the country climax at 1.44-billion people (most of them old, and many among the young disproportionally male) in 2025 and then subsequently decline, it is necessary to revisit the history of China’s demographic challenge.

What Population Bomb?

For 27 years, China was under the rule of Mao Zedong, the head of the Chinese Communist Party, between 1949 and 1976. In these years, China’s population growth soared; growing from 540-million in 1949 to 940-million by 1976. Mao’s role in this has been a subject of debate, but the country’s official propaganda encouraged big families and incentivised, both symbolically and materially, increased child-bearing. The world was changing however, and so was opinion around demographics – China was not immune from such opinion shifts. To begin with, the years of the late 1960s and early 70s saw policymakers the world over grasped by a book which made dire predictions about the relationship between population growth and economic prosperity in a country. The book, titled The Population Bomb, put out by American biologist Paul Erlich, proved immensely influential among policymaking circles.

In China after Mao, it served as something of a confirmation bias; where some within the ruling circles had already bought into what it was arguing. The role of Song Jian, a politically-connected scientist, is debated, but he had been arguing, partially on the basis of such works as The Population Bomb, for a cap on the growth in the Chinese population. By his own estimate, the country would be best suited economically in a situation where it had around 700-million citizens.

With or without his prodding, the country introduced the One-Child Policy in 1979.

The Consequences of the One-Child Policy

On the surface, the policy worked too well. The country’s population growth declined considerably in the subsequent years, with many families adhering to the strict enforcement of the policy; among them hefty fines, sterilisation and forced abortions. Rudong for example, in Jiangsu Province, was among the star perfomers in terms of enforcing and abiding by the policy, and it is among the most aged in terms of population, with the majority of its citizens being over 60 years of age.

Further, the country also has a problem in terms of the gender ratio. Since 1994, the country has seen on average 115 male births for every 100 female births. In some provinces, this reaches as high as 130 male births for every 100 female births. By government estimates, some 30-million men will be life-long bachelors.

The ‘Japanese Scenario’: What Worries China

For about forty years, China’s economy was largely reliant on an abundant supply of young, cheap labour. The population dynamics tell us that that won’t be a lever that China has for much longer. In addition to this, Chinese labour wages have been going up. Growing life expectancy from 69.3 years in the 1990s to 75.7 years as of recent, and even higher in some provinces also means that there is a now a larger population of aged individuals reliant on the government. The consequence of this is greater demand on the government coffers to provide care for the aged (65+ years old), who are currently at 240-million people, and finding increasingly little care among their limited family networks. Where it used to be the norm to have three or even four generations under one roof, now just 38% of people over the age of 60-years old live with their grown children; the pressure on these children is even more intense, with what is called the ‘4-2-1 problem’; one individual supporting four grandparents and two parents all by themselves. China is also faced by a lack of hospices, expensive medical care, and a diminishing sense of community. These senior citizens have resorted to forging their own hospices and elderly homes. As one elderly manager of a Buddhist sanctuary for the aged in Fujian province in a report I read put it, “the 80-year-olds help the 100-year-olds.”

China is not alone in the demographic challenge it faces. In fact, they only have to look across the East China Sea to Japan to see another peer country which has seen rapid growth in terms of the economy, followed by decades of demographic decline. In 2017, Japan recorded around 946-thousand new births. This was the lowest annual record since Japan began capturing this information, in 1899. Further, in Japan, more than half the population is over 46 years of age, which has led, for example, to the average age of a construction worker being around 48 years.

Japan, like China as of late, introduced measures and incentives to encourage couples to voluntarily have more children. This was in the 1990s. Clearly, it did not work out as planned. A number of issues are blamable for this, but among the most obvious is the continued decline of steady work in Japan since the 1990s, due to companies hiring people on a freelance basis; this, coupled with the aftershocks of globalisation and the 2008/9 Great Recession, only exarcebate the issue. The lack of steady work greatly matters in a country where 70 percent of women tend to quit their jobs after their first child, rendering the man the exclusive breadwinner. China has the same problem, but one which is worsened by some facts which are unique to China.

To begin with, China’s elderly population eclipses Japan’s entire population. Secondly, China is increasingly expensive to live in, especially in urban areas, where the population is increasingly concentrated, and China has also changed, and the government’s chances of affecting a spike in its population are very slim. Further, compared to Japan, China, though with a higher GDP overall, has a way lower GDP per capita at around $8, 800 to Japan’s $38, 000. In terms of GDP per capita, China is closer to the Dominican Republic at this point. Its population challenges are catching up to it sooner than other major rapid developers. A declining working population, increasingly giving birth to fewer children is set to curtail China’s economic potential.

The Problem with the Two-Child Policy

To counter the apparent decline in its population, in 2014 the government officially announced the Two-Child Policy – and if speculation on the social network Weibo is to be believed, a Three-Child Policy may soon follow – with the condition that the second child should be born at least 4 years after the first, and only to women above the age of 28. The response has been less than lukewarm, with very few applying for the second child, and even fewer expressing intent to have another child (despite the four-year gap). The reasons have to do with the apparent sway of the smaller family, as well as rising costs of raising children in modern China. Further, young men are also expected to have at least a car and an apartment before getting married, in a notoriously expensive real estate market. This places a toll on parents, many of whom participate in resource-pooling for the would-be husband and father. Because of this, China has a savings-to-GDP ratio of between 45 and 50%. Additional incentives by some local authorities include tax breaks, education and housing subsidies. Apparently, this is still not enough.

So, China’s demographic challenges can be expected to continue, with little that the government can do to reverse them. But, how much of them were the government’s making in the first place?

To begin with, China’s population growth was beginning to stall ahead of the introduction of the One-Child Policy; in 1970, there were 5.8 births per woman; by 1978, the number was closer to 2.7. Above all, the One-Child Policy was not impenetrable. In all, there were 22 ways in which parents could make the case for a second child, including (1) if both parents were only children, (2) if the breadwinner was incapacitated, and, controversially, (3) if the first born was a daughter. Ethnic minorities were also exempt from the policy. Indeed, by 2007, it is estimated that only 36% of the population was strictly subjectable to the policy. It would appear, then, that the One-Child Policy is not the only cause of the present-day challenge. The economic situations of families as they see it themselves along with changing social norms are also to be taken into account.