Tuesday, March 27, 2012

China’s one-child policy should be ended quickly

Over 30 years since launching its one-child policy, China’s demographic dividend is abruptly coming to an end.

Not only is the Chinese labour force set to decline in absolute terms, the old-age dependency ratio (the number of people above the age of 65 for every person of working age) is expected to double over the next two decades, reaching the level of Norway or the Netherlands by 2030.

Some observers have argued that China’s one-child policy is the driving force behind its demographic transition, but this is simply not the case. The sharp decline in China’s fertility rate — from 5.9 in 1960–65 to around 1.5 today — would probably have occurred irrespective of government intervention. The fertility rates of other rapidly growing East Asian economies such as South Korea, Thailand and even Indonesia have declined just as fast as China’s, yet none of these countries has implemented a one-child policy.

It is much more likely that rising incomes are responsible for the decline in fertility rates. Health services improve as income levels rise, which in turn reduces infant and child mortality. Higher incomes also lead to greater access to education, especially for young girls. This often means that women have fewer children later in life. Moreover, the necessity of having multiple children — to act as a safety net in old age — becomes less pronounced as other social security instruments are made available. Finally, education is less of a luxury and more of a necessity within higher-income societies, making the cost of education an influential factor in deciding family size. So, even if the one-child policy were not in place, the decision to have fewer children would likely still be occurring voluntarily within China due to the substantial rise in average income, just as it has in Thailand and South Korea.

Equally interesting is the fact that China’s one-child policy has not been applied uniformly across the country. Enforcement is stricter in urban areas, minorities are usually exempted and if couples have a child with a disability, they are often allowed to have a second. Given the preference of many Chinese to have at least one son, those with a daughter are also sometimes allowed to have another child, especially in rural areas. More recently, some provincial governments have relaxed the requirements in a few select areas as a policy experiment. In most — if not all — cases, the fertility rate has barely budged.

All this suggests that if the one-child policy were to be removed, China’s fertility rate would probably not rise appreciably. Indeed, if China were to grant its rural population and urban migrants the same access to social services as urban residents, the fertility rate would most likely decline even faster.

The Chinese government recognises this and is beginning to dismantle the one-child policy, albeit slowly. This slow pace is unfortunate for two reasons. First, parents desiring a second child are prevented from having one on account of the policy, and in some cases may be forced to undergo an abortion. Second, the one-child policy has contributed to China’s ‘missing women’ — there are over 30 million fewer women in China today than would be the case if its gender balance resembled that of other countries. This imbalance has occurred for a number of reasons, including sex-selective abortions, infanticide, neglect and abandonment. Such tragic occurrences can be partly attributed to the constraints imposed on families as a result of the one-child policy, and is all the more reason why China should accelerate the policy’s removal.

Vikram Nehru is Senior Associate in the Asia Program and Bakrie Chair in Southeast Asian Studies at the Carnegie Endowment for International Peace.An earlier version of this article was first published by the Carnegie Endowment for International Peace.

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