China’s Two-Child Policy

By | Updated Aug 22, 2017 9:00 PM UTC

Please have another baby. That’s China new message for couples after decades of limiting families to just one child. Why the turnabout? China’s aging. In a little more than 10 years, one-quarter of the world’s most populous country will be 60 or older. This means there won’t be enough workers in the labor force, threatening economic growth, and there may not be enough able-bodied people to take care of all those seniors. So last year, China changed its rules to allow all families to have two children. Trouble is, many couples aren’t convinced that two are better than one.

The Situation

China’s population will peak at roughly 1.45 billion by 2030 and then hover around 1.4 billion until the middle of the century. The International Monetary Fund says that the number of people in their prime working years — ages 15 to 59 — could fall by 170 million in the next three decades. The aging workforce may already be chipping into the productivity growth rate, which last fell last year to the lowest level since 1999, when factory orders evaporated in the aftermath of the Asian financial crisis. The lifting of the one-child rule worked to an extent: The number of newborns in 2016 was 18.5 million, an increase of more than 2 million compared with 2015. But those figures fell short of what policy makers expected. The one-child years left social scars. The traditional preference among Chinese parents for boys rather than girls caused many parents to abort female fetuses. The male-to-female ratio went up to 120-100 in some provinces. Single women have become empowered to reject men without money; single men are called “bare branches” because they can’t add to their family trees. In remote rural areas, men have been known to buy wives from human traffickers; authorities rescued 207 Vietnamese women being trafficked to China in 2016.

The Background

After the creation of the People’s Republic of China in 1949, the government trained tens of thousands of “barefoot doctors” to bring health care to poor and rural areas. The mortality rate plummeted and the population growth rate rose from 16 per thousand in 1949 to 25 per thousand just five years later. This prompted the first attempts to encourage family planning in 1953. Still, total population expanded to over 800 million in the late 1960s. By the 1970s, China was facing food and housing shortages. In 1979, its leader, Deng Xiaoping, decided to limit most couples to just one child. (There were exceptions for rural farmers and certain situations, like when a first child was handicapped.) It worked: The annual population growth rate averaged just 0.6 percent from 2000 to 2010. But to enforce the rules, Human Rights Watch says China forced women to have abortions and slapped expensive fines on families that violated the rules. Children born outside the state plan weren’t allowed to have their hukou — a government registration needed to go to school, buy train tickets or find a job. 

The Argument

China’s one-child policy created such a drastic demographic imbalance between old and young that it could take decades to return to normal. In part, this is because high living costs, long work hours and surging child-care expenses mean that many couples can only afford to have one child — or none. A survey by Zhaopin.com, a recruitment site, found 33 percent of women had their pay cut after giving birth and 36 percent were demoted. While removing all the family-size limits would bring about more births, Chinese policy makers like slow changes, so they can observe and act based upon results. For example, in smaller cities, where couples have been more willing to have second children after the policy change, hospitals and pediatricians have been overwhelmed by the baby boom. Officials might need to build up medical and education facilities and work out new tax breaks for families before thinking about a three-child policy. Immigration isn’t likely to be an answer, as China has strict limits on foreign workers. Businesses aren’t waiting for the reinforcements. Labor shortages have pushed manufacturers in the Pearl River Delta, China’s export powerhouse across the border from Hong Kong, to invest in automation and robots.

The Reference Shelf

  • National Geographic explained how the one-child policy changed China in charts.
  • Bloomberg News spoke with China’s top demographer, who said the government should allow three or more children.
  • Bloomberg examined China’s widening pension gap.
  • China’s not alone — this Bloomberg QuickTake explains how Japan is handling its aging population.

First published Aug. 22, 2017

To contact Bloomberg News staff for this QuickTake:
Yinan Zhao in Beijing at yzhao300@bloomberg.net

To contact the editor responsible for this QuickTake:
Anne Cronin at acronin14@bloomberg.net