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Why China's child policy may not matter

Adults and children ride on a carousel at Lu Xun Park in Shanghai, Oct. 24, 2015.
Qilai Shen | Bloomberg | Getty Images
Adults and children ride on a carousel at Lu Xun Park in Shanghai, Oct. 24, 2015.

After more than 35 years of restricting many families to one child, China announced this week that citizens will be allowed to have two children.

Baby product companies like Biostime International and Goodbaby International saw their stocks shoot up Thursday. After all, there are 160 million women between the ages of 20 and 35 living in China — if they all went from the current average fertility of 1.7 children per woman to two children per woman over their lifetimes, that would be an additional 53 million children that wouldn't have existed before.

That may eventually help out diaper makers, but experts are skeptical that the move will produce a population boom or have much of an effect on the real problem: China's low fertility has created an imbalance between the generations, and working-age Chinese will soon be outnumbered by senior citizens.

China's dramatic drop in fertility in the '70s and '80s created a demographic time bomb that will leave the country with a smaller work force and more older citizens to care for in the coming decades. That shift will require new social policies and will likely contribute to a decline in productivity and China's growth rate.

Social scientists have been pushing for an end to the one-child policy for years, and raising the fertility rate from the current 1.7 children per woman to a limit of around two children per woman may be too little too late. According to a 2005 report by the East-West Center, eliminating the one-child policy before 2010 could have stabilized the population around 1.45 billion. But now it's too late for that.

Even if Chinese women immediately started reproducing at the two children per woman rate next year, it would only push China's population peak from 2030 to 2035, according to projections published by Kristin Bietsch, a demographer with the Population Reference Bureau. The much more likely scenario that the fertility rate will gradually approach that level would cause an increase of only about 23 million people by 2050. China's population will still peak around 2030 at 1.43 billion people.

The workers who would replace and pay for China's senior citizen boom needed to have been born already.

Another complicating factor: Chinese policy isn't the only reason that fertility has dropped. Fertility tends to decline as countries become more developed, and cultural preferences also play a significant role.

The country loosened its policy in 2013 by allowing anyone who was a single child to have a second child, but far fewer Chinese took up the offer than the government projected. When surveyed, people in China say their ideal family sizes are lower than 1.75 around the current fertility rate. It looks like many Chinese families are comfortable with the smaller families and not overeager to take on the cost of raising another child, especially in the urban areas more people are calling home.

Policies aren't everything in fact, the largest drops in China's fertility occurred years before the formal one-child policy was instituted. That decline is associated with China's "later, longer, fewer campaign," which successfully encouraged citizens to marry later and have fewer children at longer intervals. Policies can be reversed, but reversing cultural preferences may take longer.