With a population of just over one billion and 400 million individuals, China is facing a demographic crisis that could slow down economic development and threatens social welfare. The leading indicators reveal indeed that the “demographic window” – the stage that helped China to create the conditions for such unprecedented economic growth – is closing. China’s Total Fertility Rate (TFR) measured a level significantly lower than replacement level for decades. This helped, over a period of two decades, to create a favorable population structure – fewer children and elderly people, with a high proportion of the working-age – and a very low dependency ratio. However, since China’s demographic transition entered into a final phase characterized by low fertility and mortality rates, the advantages of demographic dividends are disappearing.
According to United Nations estimates, China is aging more rapidly than almost any country in recent history. Its dependent elderly rate could rise as high as 44% by 2050. This rate increased from 9% to 15% between 1990 and 2017, and the percentage of the working-age population is declining rapidly. In 2018, China’s State Council estimated that about 25% of its population would be 60 or older by 2030– up from 13% in 2010, while the labor force decreased by 4.7 million in 2018.
The unbalanced structure of the population is the result of the birth-rate decline induced by socio-economic development as well as by the “One-Child” policy of 1980. Already in 1993, the mean number of children per woman was under the replacement threshold. From 2000, the TFR has been less than 1.6 births per woman.
Given the inertial nature of demographic processes, the reduction in births will intensify due to the reduction in women. Between 2015 and 2025 the female population aged 24 to 29 years old will decline from 74 to 41 million. In general, the number of women of childbearing age (15-49 years old) is expected to fall by more than 39% over the next decade. This means that the number of newborns will decrease by half even if the fertility rate remains unchanged throughout the next decade. The decline in births due to the scarcity of women implies a correspondent reduction, one generation later, in the working-age population and an increase in the dependent elderly ratio, currently equal to 15%.
To escape this dynamic – called a “fertility trap”– and mitigate its negative consequences on economic growth and social welfare, several measures have been proposed or adopted. Among those, worth noting is an increase in retirement age, which is aimed at keeping the working population stable in numbers, and the universal “two-child” policy adopted at the end of 2015.
When the “two-child” policy entered into force, China witnessed a spike in births. That year the country registered 18.46 million live births — the highest number since 2000, and an 11% increase from the previous year. Nearly half of the babies born in 2016 had at least one older sibling, suggesting that the new policy was likely the cause. However, the effectiveness of the policy was not confirmed by birth rates in the following years. In 2017 the number of live births was 17.23 million, 3.5% less than in 2016. The set target of 20 million newborns was not reached nor did a new baby boom occur.
Several factors act against a long-term baby boom, both structural and socio-cultural. First, a lack of generations in reproductive age due to China’s one-child policy, and the lack of women caused by an imbalanced sex ratio at birth, led to a decline in birth rates. The moderate outcome of the two-child policy is also based on economic and cultural factors. Several surveys on people’s willingness to have children carried out by the National Health and Family Planning Commission in 2015 found that 74.5% of families would not raise a second child due to economic reasons, 61.1% would not do so because of the energies involved in child-rearing, and 60.5% would not do so due to a lack of caretakers. Parenthood pressures, child-rearing costs, women’s career development, the pursuit of better quality of life, and the responsibility of caring for aging parents put greater limitations on people’s planning for a second child. It is also worth noting that women’s ‘desire for motherhood’ has drastically changed from ‘eager to give birth’ to ‘don’t want to’ or ‘can’t afford to’ give birth. The outcome of the interaction of these factors is well represented by the recorded 15.23 million births in 2018, a drop of two million compared with the previous year and – more importantly – the lowest number of births China has recorded since the 1961 famine.
The revolution in China’s family planning policy – from restricting to encouraging childbearing – is remarkable in terms of scope. In the future, a universal two-child policy hopefully will address the challenge of population aging, contribute to economic growth and allow most couples to have the number of children they desire. However, for both economic and demographic reasons, rebalancing the population structure is a decades-long process. As evidence has shown, changing family planning policy alone will not be enough to make a significant difference toward a demographically balanced society. Alleviating concerns about jobs, social welfare, the cost of living, housing, kindergarten access and gender equality, among others, is critical to increasing China’s current birth rate.
Apart from functional reasons like the impact of ageing on economic development, an important issue concerns the social conditions of the elderly population, which benefits less from economic reforms. According to official estimates, the number of Chinese citizens aged 60 or older reached 241 million at the end of 2017, representing 17% of the country’s total population. The figure is expected to peak at 487 million, or nearly 35%, around 2050. This issue is well known and discussed by Chinese authorities and special programs have been implemented for the older population such as, among others, pension and insurance plans or “three-generation living arrangement” rewards. To conclude, the radical and coercive one-child policy that halved the new generations for over 30 years let China exploit the demographic dividend for several decades. At the end of this long period, however, significant economic and social challenges affect the development of a country that today has more people to feed and more elderly to take care of than any other country in the world.