Recently, China has decided an end to its longstanding one-child policy and encouraged couples to have two children. For nearly a decade, one-child policy had prevented about 400m births and forced about 36% of Chinese families to have only one child. This policy was introduced in the late 1970s when China’s population approached one billion. At that time, this one-child policy was thought to benefit China’s economic growth and alleviate the pressure of bringing up a family with multiple children. However, as a result, most children who were born in the 1980s and 1990s grew lonely without any brothers and sisters.
Now however, there is the possibility that the one-child policy will gradually hinder further economic growth and lead to social problems in China. The figure above shows how people from 40 to 60 years old took up a large proportion of the whole population in China in 2014. Children under 14 years old took up the second largest proportion of the whole population. This illustrates that the dependency ratio in China is large and this may put stress on those between the ages of 20-40 to support these groups of people. This puts great pressure on China’s government to provide support for the groups that are dependent, and the opportunity cost of providing such support is also great.
Moreover, the one-child policy caused great inequalities between males and females in China. The mortality of female-babies is high in China, in which the birth-rate ratio of boys and girls is 117:100, while the standardized ratio is 102:100. This ratio supports that as each family was forced to have only one child, some families in China would choose to abort a female-baby in order to have a male-baby. Thus, researchers predicted that in 2020, there would be more than 30 million more males around 20 to 30 years old than females at the same age. The imbalance of the number of males and females in the future would lead to a large decrease in the marriage rate, which therefore greatly decreases birth rate and leads to the increase in the dependency ratio. As a result, a vicious circle will form, as the resulting declining labour force will feed into a lower rate of long-run economic growth.
China’s one-child policy reversal was cautiously welcomed when China’s government announced its end. The government said it was relaxing the rules to allow all couples to have two children, which most families in China agreed with. Officials hope that this reversal will adjust the population structure and solve the problems of imbalanced numbers between males and females.
Moreover, this decision also has an impact on the world economy. It was reported that population in China would grow soon after 2015, and therefore, the consumption of baby products would greatly increase. This could trigger a timely boost to economic growth all over the world and increase the consumption rates in most countries. Further, having more children means the Chinese labour force will be larger in the future. Once the population structure is adjusted successfully, the Chinese labour force could have the potential to lead a burst of economic growth in the world.
However, there are also some people that feel concerned about this policy reversal. They claim that the one-child policy did not actually hinder families from having more children in the last decades. They worry that the end of this policy will lead to a larger than expected increase in China’s population in the next 5 years. Therefore, limited resources with a large population will lead to a higher level of unemployment than would have otherwise prevailed.
That being said, the effects of the ending of the one-child policy remain ambiguous, and in the long term, the positives of ending China’s one-child policy far outweigh its negatives.
