Entering building with sun ray shining through.

China's Two Child Policy: Too Little Too Late?

08 December 2015

Announced in a very 21st century way, China's official news agency recently tweeted that China will be implementing a policy allowing couples to have two children.

The abandonment of the one child policy after three decades has been making headlines recently but what instigated the change, and what is the likely impact?

Established in 1979, China's one child policy was introduced by the Communist Party amid fears of the impact of exponential population growth and food shortages as China's population was growing by 1.9% annually. Couples were incentivised to have only one child with education, childcare and healthcare benefits, with those contravening the rules subject to fines (up to ten times a family's annual income) and forced abortions. Second children born in violation of the one child policy were denied a residence permit from the government, leaving them without an official identity.

With China now experiencing an economic slowdown it seems that the policy has proved too effective as the country experiences a rapidly ageing population and a scarcity of workers. China now has the world's largest ageing population, and it is estimated that by 2050 there will be 440 million over-60s. The working population (those aged between 16 and 59) has been falling since 2012 and this, coupled with increasing unemployment and an economic slowdown, has the government worried. It is estimated that by 2030, the ratio of taxpayers to pensioners will be just two to one. Less than a third of the workforce had a basic pension in 2013; this is problematic in light of the fact that women in China usually retire at 55 and men at 66, and there is an average life expectancy of 76.

Unfortunately for China, it is unlikely that this change in policy will lead to the baby boom that the country desperately needs. The policy had already been relaxed in recent years on a piecemeal basis; it is estimated that in the last 10 years only one third of the population has been limited to one child. Ethnic minorities were permitted to have more than one child, as were those whose first child was a girl or disabled. However, reactions to the relaxations have been lacklustre. Since 2013, citizens who had grown up as an only child were announced to be eligible to have two children, but of the 11 million eligible citizens only 1.5 million applied for the privilege and less than 0.5 million babies were born as a result.

The Chinese government is a victim of its own success; its propaganda was so effective that couples are now less inclined to have more than one child. Real estate is expensive, especially in urban areas, and childcare options are limited; nannies are unregulated and kindergartens do not cater for those under three years old. The cost of education is also cited by Chinese parents as a reason to have only one child. The culture of filial devotion in China means that a couple of working age often financially and emotionally supports four elderly parents alone, and a child. Adding a second child may be seen as stretching resources that little bit too much.

The changes should be seen as a step in the right direction for human rights rather than heralding a baby boom and a consequential boost to the economy. The impact, if any, on China's working population will not be felt for at least 16 years (and 9 months!) and this relaxation in policy is unlikely to bring about the demographic changes China needs. After all, it is a lot easier to enforce a one child policy than to encourage an increase in conception.