China's Baby Bust: Policy, Culture, and the Demographic Challenge
China's Baby Bust: Policy, Culture, and the Demographic Challenge
As China cedes its long-held title of the world's most populous nation to India, President Xi Jinping faces a demographic crisis that threatens to undermine the country's long-term goals. The decline in population growth is not unusual with industrializing nations but has been significantly accelerated by the government's now-abandoned "one-child policy." This policy not only skewed the nation's gender ratio in favor of males but has also set the stage for far-reaching economic and social consequences.
According to United Nations data, both India and China hover around 1.4 billion people, but the birth rate in China has plummeted to a staggering low of 6.77 newborns per 1,000 people as of last year—the lowest level since at least 1978. Compounding the issue is the shifting ratio of working people to retirees; what was once over 6:1 in the year 2000 is projected to fall to under 2:1 by 2050. This demographic shift presents a complex challenge for Xi’s administration, as it grapples with the implications for the world's second-largest economy.
Over the past decade, China has undergone a series of policy shifts aimed at addressing its declining birthrate, each with varying degrees of success. The one-child policy, which restricted the majority of Chinese families to a single child for 35 years, officially came to an end on Jan. 1, 2016. This change was not abrupt but occurred in a phased manner over three years. The first significant step was in March 2013, when the National Population and Family Planning Commission was merged with the Ministry of Health, forming the new National Health and Family Planning Commission. Later that year, in November, a partial relaxation was announced, allowing couples to have a second child if one parent was an only child. However, this change had a limited impact; by August 2015, only 1.69 million out of an estimated 11 million eligible couples had applied to have a second child.
Despite these efforts, the birthrate continued to decline, leading to another policy shift. On May 31, 2021, China's Communist Party Politburo, announced that all married Chinese couples would be allowed to have up to three children. This was a clear acknowledgment that the shift to a two-child policy in 2016 had failed to reverse the country's declining birth rate. On top of these larger policy shifts, the government is also trying to find more innovative ways to boost fertility rates.
One such initiative aims to alleviate the financial burden of raising children by offering free college education for families who have a third child born after 2024. Additionally, some regions are providing financial reimbursements for in vitro fertilization treatments. Beyond these financial incentives, the government-backed Family Planning Association has been reprogrammed to focus on boosting births. Local governments have also joined the cause, distributing gifts like rice cookers and water bottles at events aimed at encouraging family formation. In some areas, officials have organized hikes and matchmaking events to promote the values of marriage and starting a family. The city of Shenzhen has even announced a lump-sum birth bonus and annual child-rearing subsidies until the child is 3 years old, as part of its efforts to incentivize larger families.
In a further attempt to address the demographic challenges, China has also undertaken significant legal reforms, particularly through the recent revisions to the Law on the Protection of Women's Rights and Interests. Effective January 1, 2023, this expanded law aims to create a more equitable environment for women in the workforce, hoping to give increasingly career-oriented women peace of mind when it comes to job security. For instance, the law now prohibits employers from engaging in gender-based discrimination during recruitment, such as limiting job offers to males or inquiring about a woman's marital or maternal status.
Moreover, the law strengthens maternity rights. Employers are now restricted from reducing benefits or hindering promotions for women who are married, pregnant, on maternity leave, or breastfeeding. If a female employee's contract expires during her pregnancy or maternity leave, the law mandates an automatic extension until the end of the maternity leave. These legal provisions are designed not only to protect women's rights in the workplace but also to alleviate some of the economic pressures that discourage larger families. By tackling these issues through legal avenues, the Chinese government is striving to create a more supportive environment for family formation, which, it hopes, will contribute to reversing the declining birth rate. While these legal reforms represent a valiant effort to combat China’s demographic challenges, the measures are unlikely to stem the tide of forces behind the decline.
It's important to recognize that this demographic challenge is not unique to China but is a common trend among industrializing nations. The concept of the "low-fertility trap" was introduced by demographers in the early 2000s to explain the self-reinforcing mechanisms that make it difficult to boost fertility rates once they fall below a certain level. Lower fertility often leads to increased individual aspirations for personal consumption, but it also results in an aging population and fewer job opportunities. This creates a sense of economic pessimism, further discouraging young couples from having more children. Additionally, as family sizes continue to shrink over generations, societal norms around the ideal family size also change, contributing to a persistent decline in fertility rates that becomes increasingly difficult to reverse.
Financial hurdles remain a key obstacle for families contemplating additional children; for instance, some families spend as much as $28,000 annually on raising just one child, making the financial aspect of having more children quite daunting. The unique 4-2-1 family structure in China, where two adults are responsible for both their single child and four grandparents, further strains family finances. Work-life balance is another significant issue, particularly for women in career-driven roles who are concerned that limited childcare options could necessitate leaving their jobs. This comes amid a broader cultural shift, evidenced by falling marriage rates. These challenges are compounded by an unstable job market, with the youth unemployment rate recently peaking at a record 21%.
This phenomenon is not isolated to China; neighbors Japan and South Korea have some of the world's lowest fertility rates despite significant policy efforts and financial investments aimed at encouraging young people to have more children.
Yet, despite these comprehensive efforts, China faces a daunting uphill battle. The demographic challenges are deeply rooted, influenced not just by past policies but also by a myriad of social and economic factors that discourage young couples from expanding their families. Whether China can successfully navigate this demographic maze remains an open question, but what is clear is that the implications are far-reaching, not just for China but for the region and the world.