End of one-child policy exposes but won’t solve China’s woes

Comment
12193762_954746364585196_7095815743609635057_n
IMAGE/Cason Reily

Last week, the Chinese government announced that it was fully lifting its one-child policy, which was instituted in 1979. All couples are now allowed at least two children. From a human rights standpoint, this is almost certainly a good thing. We are likely to see the end of an era that included forced sterilization, infanticide, and other abuses. However, it is doubtful that human rights were the motivating factor in the policy change.

This does not mean the change comes without reason. After more than 30 years, new births in China have dropped well below replacement levels, with the World Bank reporting a fertility rate of 1.66. In the long-term, this low birth-rate will reduce the portion of the Chinese population in the labour force as not all retirees are replaced. If fertility remains low and there is little immigration, this trend cannot be reversed, and economic growth will be permanently more difficult. Given China’s recent economic slowdown and concerns that the country has overinvested relative to its capacity, a rise in fertility could plausibly provide an economic boost.

However, there are several reasons not to raise the assessment of Chinese economic prospects in accordance with the policy change. For one, even granting an immediate rise in fertility, the economic benefits will be a long time coming. The first members of the new two-child generation will not be contributing directly to Chinese output for quite some time, and it will be even longer before this larger generation would have a major impact. The one hope might be that a rise in fertility could provide a small boost to consumption as families save less and spend more on their children’s current need. This could have some effect on correcting imbalances between savings and consumption both within China and globally.

However, either of these effects depends on the assumption that Chinese fertility will in fact increase. While this might seem a natural consequence of the policy, it cannot be taken as given.

The institution of the one-child policy is perhaps the greatest ever feat of demographic and cultural engineering. In 1979 the Communist Party showed that they could regulate and manage not only where people could move or what sort of work they could do, but could influence the most intimate and important decisions that families make. While the policy did allow for exceptions, especially in rural areas and among ethnic minorities, it has had a profound effect on Chinese economic and social development over the past several decades. It has somewhat eased the strain of extremely rapid urban growth, but also created a new culture in China in which, in most urban areas, being an only child is the accepted norm. The policy’s success is a testament to the power of the Communist Party of that era.

While the policy demonstrates the power of the Party at the time, it highlights its relative weakness today in shaping culture and society. It is unlikely that Xi Jinping’s government will be able to achieve as much with the policy’s reversal. For one, the one-child norm is today thoroughly inculcated in Chinese urban family-life; changing it back will not be so easy. The party no longer has a monopoly on culture, communication, or media, and despite some increased censorship efforts, looks unlikely to regain such a high level of control. Pop stars, smartphones, and brands now have greater sway over the Chinese youth than does the Communist Party. China has adopted a forward-looking individualistic streak: the prevailing outlook is no longer the future of the country or Party, but each individual’s prospects in his or her career, life, and consumption possibilities.

Further, economic changes themselves could have a negating effect on any increase in fertility. As more Chinese, especially in rural areas, transition towards middle-class urban lifestyles, it is not unlikely that their family structures will undergo shifts as well. In this geographic and socioeconomic transition, additional children cease to be an economic necessity and can become a costly burden.

This policy change does not demonstrate the impressive idea that the government in the world’s most populous country can still dictate family planning. Rather, it is better understood as a government responding to changes in a country over which it no longer has outright control. This change shows the Communist Party’s lack of near-term control over the economy and relative inability fundamentally to alter culture and society. Though allowing more than one child per family might provide a small increase in fertility compared with before, it would be irrational to expect that it will induce an upwards trend. Nearby countries without family planning regulations do not tend to have dramatically higher birth-rates despite the fact that couples may have as many children as they please.

The government has fumbled recently in its attempts to manage the economy and foreign policy.  Misguided interventions in a tumbling stock market earlier this year failed to have any effect other than to diminish investors’ confidence that China is willing to let its markets operate properly. When the US Navy flouted China’s territorial claims by sailing near islands in the South China Sea, the reaction in Beijing amounted to little more than foot-stomping. President Xi needs to realise that – largely in virtue of his party’s successes – China is radically different than the country governed by Mao or Deng. He must learn to govern not with sweeping yet unpromising reforms and reactions, but with nuanced changes in policy, carefully designed to nudge the country back in the right direction.

Liked reading this article? Sign up to our weekly mailing list to receive a summary of our best articles each week – click here to register

Want to contribute? Join our contributors group here or email us – click here for contact details