Facing a Demographic Dilemma, China Relaxes Birthing Policy to Allow 3 Children per Couple

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Well, that backfired. China’s decades-long practice of imposing birth limits on families has left the People’s Republic with an aging populace and rock-bottom population growth.

Faced with an emerging demographic dilemma, Beijing on Monday announced a continued unwinding of the policy – now allowing all married couples to have up to three children. According to state-owned media outlet Xinhua, the policy will restore “China’s natural advantage in human resources.”

The Old People’s Republic

China’s economy rocketed to the status of the world’s second-largest on the back of young workers. In 1980, China enacted the rigid “one-child policy” to quell the then-surging population growth.

In 2015, Beijing relaxed the policy permitting all couples up to two children. But a look at the 2020 census figures released in May show that hasn’t exactly brought the stork back to Chinese households:

  • Even with the relaxed restrictions, births have fallen for 4 straight years. Population growth over the last decade was the lowest since the government began collecting data in 1953.
  • In the past five years, China’s official fertility rate has fallen sharply to 1.3 births per woman, one of the world’s lowest.
  • Fewer babies means an aging population. The census showed 18.7% of Chinese are now 60 or older – up from 13.3% in 2010. The working population, aged 15 to 59, is down close to 7% in the last decade.

Economists say that China will likely face severe pressure on the pension system and authorities will act in the next five years to postpone the official retirement age.

Social Framework: Beijing also announced policies in the arena of healthcare, education, and social welfare aimed at making raising more children economically feasible.

But it’s not clear whether relaxing birth restrictions will actually improve the birth rate. A 2017 study by the All-China Women’s Federation showed that only about half of Chinese couples are even willing to have two children. And experts and China’s central bank are still calling for the party to abolish birth limits entirely.

A Costly Endeavor: Weibo (Chinese Twitter) was buzzing on the news. One popular post offered a daft metaphor on the economics of having multiple children: “I’m not buying three Rolls-Royces not because there’s any restriction, but because they’re expensive.”