Nov 03, 2016 06:26 PM

'Two-Child Policy' Not Enough to Halt China's Plunging Fertility Rates

China now has the lowest fertility rate of any country in the world, according to recent figures compiled by the National Bureau of Statistics (NBS).

Data published in the China Statistical Yearbook 2016 showed that China recorded a total fertility rate (TFR) of just 1.05 for 2015 — the lowest fertility rate of any country in the world. The TFR is the number of children a woman would be expected to have if she lived to the end of her childbearing years.

The end of China's one-child policy in early 2016 may result in a short-term spike in birth rates, but the country's population is undeniably facing a sharp decline over the next few decades.

Worse still, the nation's population problem is being compounded by a serious gender imbalance. More male than female babies are born in the country every year, a difference that is 10% greater than in an average country. This means that a total fertility rate of 1.05 in China will have the same impact on population size as a 1.0 TFR in a developed country.

Developed countries today need a 2.1 TFR to maintain their existing population sizes. China, thanks to its surplus of men, needs a TFR of 2.2 to reach its replacement fertility rate.

Evidence accumulated over the past 20 years strongly suggests that China has already fallen into the "low-fertility trap". Demographers believe that countries with TFRs as low as China's will probably never return to replacement fertility levels.

Inflated figures

This latest data from the NBS seems to contradict Ministry of Health and Family Planning official Yang Wenzhuang's November 2015 announcement that China's 2015 TFR was somewhere between 1.5 and 1.6.

Annual fertility rates tend to fluctuate from one year to the next, and there is a natural margin of error since the NBS surveys only a thin cross-section of Chinese society — approximately 1% of the total population. Even so, Yang's figures seem implausibly inflated compared to the NBS data.

In 2015, authorities in Yichang, Hubei province, conducted a citywide fertility survey that showed that Yichang's TFR for that year stood at just 0.81. The survey looked at 30% of Yichang's female population of childbearing age — over 30 times the percentage of the population surveyed in the NBS censuses — and is probably extremely accurate as a result.

Yichang is a prefecture-level city comprising five counties, including ethnic minority enclaves. The municipality also includes a higher percentage of rural land area than the average Chinese city. Since rural areas in China tend to have lower fertility rates, the difference between Yichang's TFR of 0.81 and the national figure of 1.05 seems acceptable. But the data from the Yichang survey make Yang's estimates sound even less credible.

Delayed fertility

Despite 2015's low figure, 2016 and 2017 will probably see a small jump in China's fertility rate.

A breakdown of China's 2010-15 TFR data according to birth order (differentiating between women giving birth to their first, second, third, or later children) shows that 2014's TFR was higher than in the previous year.

This was mainly due to an increase in births of second and third children after policy changes in 2013 allowed parents to have a second child if either parent was a single child. Parents' desire for more than one child ("fertility desire" in demographer-speak), which could not be expressed under 2013's policy environment, had a delayed effect on the following year's figures.

China's fertility rates have unquestionably been falling for years, but 2015's exceptionally low figures might also partially stem from delayed fertility plans. In some years, enough women choose to delay childbearing to create a cumulative downward trend in the population's fertility rate.

Assuming that the women surveyed in 2015 had only delayed childbearing, rather than permanently decided against it, the TFR could spike again in 2016 and 2017 and in theory compensate for 2015's low rate. The replacement of China's one-child policy with a two-child policy in early 2016 may even have helped to release an accumulated fertility desire nationally.

However, since the average woman desires fewer children and has a lower chance of successfully giving birth as she ages, a TFR spike in the near future would only compensate partly for the decline in fertility rates last year. Additionally, current demographic trends tell us that there will be 40% fewer women of childbearing age after 2017 than there are now. In short, China's fertility rates look set for a drastic decline after 2017.

Bleak prospects

Even though the TFR has been shrinking every year since 1950, the population has continued to increase. This could change in the next decade.

If China's TFR stays at an optimistic 2015 reading of 1.4 (roughly halfway between the NBS' 1.05 figure and Yang's estimate of a 1.6 TFR), the country would still see 36.4% fewer people being born in each successive generation. The total population would shrink by 50% every 50 years. Even if Yang's calculations do prove to be accurate, a constant 1.6 total fertility rate would still result in a 40% population decrease every 50 years.

More importantly, even if China's government simply allows people to have as many children as they want, the TFR could still fail to return to the replacement fertility rate. Put simply, for various reasons Chinese people today just don't want to have more children.

Low fertility rates are a well-documented side effect of rapid economic development. China's modernizing economy places ever-increasing skill demands on its workers, which in turn leads to rising education costs for children. At the same time, young adults are earning more than ever, and the cost of taking time out to raise a child is becoming uncomfortably high.

Decades ago, many Chinese people saw children as a form of insurance for old age. However, state pensions and changing societal attitudes have killed off this particular motivation. Most parents who desire more than one child today do not expect to be financially dependent on their children in the future. In economic terms, raising a child today is a personal sacrifice made for the good of society.

China is a secular society largely free from religious influences on family planning. Parental pressure, a major factor contributing to China's high fertility rates in the past, is also no longer an issue for many of today's independent young people. Many older parents are now opposed to the idea of their children having second or third children.

Empty rural schools

After more than 30 years under the one-child policy, most urban Chinese now see single-child families as the norm, and need exceptional encouragement before considering second children.

In the past, rural areas' relatively high fertility made up for the lower fertility rates found in cities. In recent years, however, many young people from rural areas have migrated to cities. These young migrants, alienated from their hometown peers and burdened by the pressures of city life, tend to have similar fertility rates to long-term city dwellers.

As more and more young people leave for the city, birth rates in rural communities have continued to fall. In the past decade alone, around 50% of rural schools in China have been closed down as attendance has declined. In many villages, children must now travel to the nearest township or even the nearest prefecture-level city to go to school.

Rural-school closures are part of a vicious cycle. The fewer schools and child care facilities there are in a village, the less attractive raising a child looks to potential parents, which in turn exaggerates the low fertility rate that led to school closures in the first place. Yichang's 0.8 TFR is a clear example of how rural fertility rates can fall below the national average.

The rapid aging of China's population is another self-reinforcing problem. A growing number of retirees will soon be supported by a shrinking pool of taxpayers. This burden is not only economic, but also psychological — adults who don't have siblings will find their emotional resources increasingly stretched as their parents grow old and require more care. Younger adults who have to spend time and money propping up a top-heavy population pyramid tend to desire fewer children, causing the overall fertility rate to fall.

Liaoning: China's future?

China should lift all family planning restrictions if it wants any hope of escaping the low fertility trap. But many people are still being punished for having more than the legal number of children.

Liaoning province, in northeastern China, recently drafted a law that will force families with more than two children to pay fines of up to 10 times the average income in their city last year for "excess" children — an absurd measure at a time of a dangerously low national fertility rate.

Targeting large families is especially counterproductive because they are the families who will be responsible for lifting China out of the fertility trap — if China ever escapes.

The percentage of children being born to families with three or more children is a sort of litmus test for the sustainability of a country's fertility rate. When the majority of births in a country happen in large families, the country's TFR is probably at, or near, replacement levels.

A simple thought experiment will demonstrate this. In a hypothetical community of seven families, families 1 through 7 might desire 6, 3, 2, 2, 1, 1 and 0 children respectively. If all families get to have as many children as they wish, the seven families will produce 15 children, and have a TFR of 2.14 — close to the replacement fertility rate. Even though there are only two families with three or more children, they account for two-thirds of the community's total fertility rate.

Our imaginary seven-family village also shows us how grossly inadequate the current two-child policy is. Under this policy, families 1 through 7 would have 2, 2, 2, 2, 1, 1 and 0 children respectively, resulting in only 10 births across 7 families, and a TFR of 1.43. Because there will always be people who do not wish to, or cannot, have children, the actual TFR in a country where children from two-child families account for the majority of births will probably still be much lower than 2.0.

Liaoning's new family planning rules look especially misguided if you compare the province with nearby South Korea. South Korea has a land area of 100,000 square km, and had 438,700 births and a population of 49 million in 2015. Liaoning is 1.5 times larger than South Korea, and has a population of 43,820,000 — almost 90% the size of South Korea's population. Yet, in 2015, the Chinese province had only 57% as many births as South Korea.

South Korean authorities have been actively attempting to boost their national fertility rates since a restrictive 30-year national family planning program ended in 1995. Then-President Lee Myung-bak even announced a 3.7 trillion won ($3.2 billion) investment in preschool education and day care in September 2010, but the country's TFR remains still stuck between 1.1 and 1.3. Meanwhile, authorities in Liaoning are actively discouraging people from starting large families.

Liaoning should serve as a warning to the rest of China. Contrary to population control theorists' predictions, a drop in fertility has made Liaoning poorer, not richer. From 1980 to 2015, Liaoning's population growth was significantly slower than the national figure, and the per capita GDP growth rate was a dismal 20% less than the national rate. The province even experienced negative GDP growth for the first time this year.

Liaoning's TFR, which was as low as 0.74 in 2010, is just a decade or two ahead of the national trend. Unless China takes steps to actively encourage larger families, the rest of the country could soon look a lot like Liaoning.

Liang Jianzhang is the CEO of travel service company Ctrip; Huang Wenzheng runs the Chinese-language website, "Population and Future".

NB. The original version of this story gave the incorrect figure for Liaoning's planned fine.

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