Wall Street Journal, 29 October 2015
BEIJING—China will abandon its one-child policy, perhaps the most notorious of the Communist Party’s intrusions into Chinese lives, amid a looming demographic crunch that threatens the long-term health of the world’s second-largest economy.
All Chinese couples will be allowed to have two children, Chinese official media said, showing Beijing isn’t ready to totally relinquish its grip on the homes and bedrooms of its people. Demographers also warn that the move may be too little too late, as China already faces a declining, graying population without the workers it needs for its vast economy.
Still, the move is symbolically significant and amounts to an acknowledgment of the social and demographic problems the 35-year-old policy has created. “This is a historic moment signaling the complete end of the one-child policy,” said Wang Feng, a demographer at Fudan University in Shanghai.
China’s official Xinhua News Agency didn’t offer a timetable or any other details. The news came on the last day of a meeting of top party leaders known as the Fifth Plenum, where they charted out China’s economic and social plan for the next five years
The meeting and the decision to drop the one-child policy took place against a backdrop of uncertainty for China’s leaders.
Manufacturing and infrastructure spending, which drove three decades of astonishing growth, no longer pack the same punch. Labor costs are already rising amid higher expectations from Chinese workers.
Beijing faces the difficult task of nurturing long-term growth, including a difficult shift to depend more on consumer spending and services. An aging population with fewer young people could drain resources and make that shift harder.
The policy has caused social disruption as well. Due to social pressure to have boys, about 116 boys were born for every 100 girls in China last year, according to official media, compared with the World Health Organization’s natural rate of around 105 to 100. It has also led to horror stories such as local officials who force women into abortions to make population targets.
Chinese officials will now face pressure to drop reproductive controls altogether. Many demographers say that a move two years ago that weakened the policy resulted in a disappointingly small bump in births.
China has the world’s largest population at 1.37 billion. But China’s working-age population—those who are 15 to 64—is drastically shrinking. The United Nations projects that the number of Chinese over the age of 65 will jump 85% to 243 million, in 2030, up from 131 million this year.
In effect, said Cai Yong, an expert in China’s demography and professor at the University of North Carolina, China risks becoming old before it becomes rich. “I’m quite pessimistic,” said Mr. Cai, who said the Communist Party missed its best chance to lift the policy a decade ago.
Even without the one-child policy, many Chinese worry about the expense of a second child in a country where education and products such as imported baby formula can be costly.
Couples like Shanghai-based bank worker Li Shuning and her husband, Wang Jian, both 32 years old, have a year-old son and say they don’t want more. “For a second child, my answer is no, no, no. Doesn’t matter what the policy is,” said Ms. Li.
The price of raising a child is too high and the effort is too great, she said. “I can’t imagine who would have the energy to raise another child,” she said.
Many businesspeople, including James Liang, the co-founder and chief executive of travel site Ctrip.com International Ltd. , say the shift isn’t enough.
“It should be completely removed,” said Mr. Liang. “Even with no restrictions, there would be too few babies.”
Mr. Liang said companies like his, which employs 30,000 people, have greatly benefited from having a large work force. More than 10,000 people work in Ctrip’s research and development center, he said.
Still, many demographers and citizens in China cheered Thursday’s announcement, which dominated China’s social media. “This is a huge adjustment for China’s population policy. Thumbs up for the central decision,” wrote Le Yun, an associate professor with Guangdong University of Technology, on his verified microblog.
Bao Fan, chairman and chief executive of investment bank China Renaissance, described on his WeChat social-media account an exchange at a public forum when asked what China might be like in 100 years. “I said two things: first, China will become world’s largest elderly home,” he wrote. “Second, China will have world’s largest population of robots.”
Birth restrictions have caused other unintended consequences, such as a trend of birth tourism in recent years. To skirt around fines that China’s National Health and Family Planning Commission inflicted for multiple births, many Chinese citizens flocked overseas—to places like Hong Kong and the U.S.—to have a second child.
Xie Weina, a 36-year-old manager of a tech firm in Beijing, said she wants a second baby and is scrapping plans she had to go to the U.S. to give birth. “I’m planning to have a serious discussion with my husband,” Ms. Xie said.
Some of China’s demographic issues come from its own success. China’s population trends have followed countries like the U.S., Japan and South Korea in falling birth rates as the population becomes more affluent and educated.
China’s fertility rate—or roughly the total births per woman during childbearing years—was 1.7 in 2013, according to the most recent World Bank data, compared with 1.9 in the U.S. That is down from 2 per woman for both countries 20 years before.
Chinese leaders implemented the one-child policy in 1980 in an effort to rein in explosive population growth and help raise living standards. It was rooted in a Mao Zedong-era baby boom. China’s population rose by nearly half to about 807 million people in 1969 from when the Communist Party took over the country 20 years before. That led to fears among the leadership that China faced a population boom it couldn’t feed.
China’s fertility rate dropped to 2.7 in 1979, from 5.5 in 1970 due to a policy encouraging people to marry later, wait longer between children, and have fewer babies. Still, lingering overpopulation fears led the leadership to enact the one-child policy.
The one-child policy led to myriad problems, including abortions and sterilization forced upon women by officials to meet population targets and tiny nuclear families that placed the burden of elderly care on single children. It left 150 million Chinese families, or one in three, with only one child, said Mr. Wang of Fudan University.
‘For a second child, my answer is no, no, no. Doesn’t matter what the policy is.’
—Li Shuning
Demographers began to present a united front in 2000, arguing that China was dangerously close to falling below a replacement rate of 2.1 children for every woman. Activists stepped up opposition. Chen Guangcheng, the blind activist who famously escaped home confinement and made his way to the U.S. embassy in 2012, became well-known in China in the 2000s for opposing forced abortion.
It wasn’t fully clear how many births were likely to result from the policy shift announced Thursday. “A million or two additional births in the next couple years is the most one can anticipate,” said Mr. Wang.
On Thursday, several baby-related stocks surged ahead of the announcement. Stroller and car-seat maker Goodbaby International Holdings Ltd. jumped 7.4%, while infant-formula maker Biostime International Holdings rose 5.5%. Shenzhen-listed Beingmate Baby & Child Food also rose 4.8%.
China effectively hobbled the one-child policy in 2013, when it allowed couples to have two children if one parent came from a household without other siblings. It has also long allowed exceptions in some parts of the country.
The 2013 move also led to a frenzy of anticipation from baby-related businesses and a brief bump in shares of Chinese formula makers and other baby-related companies. It resulted in 1.45 million new birth applications as of the end of May, according to the most recent data from the China’s National Health and Family Planning Commission. But the figures have so far disappointed many demographers.
Even rural residents, many of which have been exempt of the one-child policy, are reluctant to have bigger families, said Scott Rozelle, co-director of Stanford University’s Rural Education Action Program. “Fertility has collapsed in rural and poor areas,”said Mr. Rozelle. “Anyone there can have two or three babies, but no one wants that.”
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