(UPDATE on Nov. 15 at 10 a.m. EST with details on changes to China’s one-child policy from the Communist Party meeting.)
China’s population is aging, largely because of the one-child policy in place for decades.
With China’s population likely to peak by 2020 and then start declining sharply, the government will have no choice but to act soon, according to Ting Lu and Xiaojia Zhi, China economists with Bank of America Merrill Lynch (BAC) in Hong Kong. “We are highly convinced the Chinese government will announce a significant change (allowing families to have two children if at least one parent is a singleton) to the outdated one-child policy in the next few months,” write Lu and Zhi in a new report.
Further details of party policy decisions published Friday by the official Xinhua News Agency show that change is indeed coming: Couples will be able to have two children if either parent is an only child, according to the new policy document fleshing out a communique released earlier this week from the four-day party plenum. Under the current policy, as Bloomberg News notes, Chinese couples can have a second child only if both parents are themselves only children.
China’s not the only Asian country with a demographic problem. Japan’s population is aging faster than any other major economy’s, spurring demand for everything from adult diapers to self-driving cars. Neighboring South Korea has one of the world’s fastest-aging populations, too, with a birth rate of just 1.24 children per woman in 2011, well below the minimum replacement rate of 2.1 children. Singapore Prime Minister Lee Hsien Loong last November told Bloomberg News that encouraging citizens to have more children is the city-state’s biggest challenge.
Asian countries are trying to cope. In Singapore, for instance, the government announced in January a plan to spend 25 percent more for fertility-treatment funding, paternity leave, housing assistance, and other measures to encourage families to have more children.
South Korea’s government is trying to address a shrinking workforce by opening to immigration from such places as Nepal; the number of immigrants has increased sevenfold since 2000, Bloomberg News reported in February, and immigrants as a percentage of the population could top 6 percent by 2030, compared with 2.8 percent now. Japan could benefit from immigration reform, too. Opening to immigrants could help Japan’s population problem and boost growth, Standard & Poor’s (MHFI) chief global economist, Paul Sheard, wrote in a report published last week. “Given Japan’s shrinking population and workforce, radical action should be taken to raise the fertility rate and embrace immigration,” he argued.
Unlike their counterparts in those countries, China’s leaders have an easier way to address the shrinking population: Ease or end the one-child policy. That wouldn’t solve the problem, but it would help.