China introduces two-child policy: what to expect?

China introduces two-child policy: what to expect?

During the recent Fifth Plenum of the 18th Party Congress in Beijing, Chinese leaders took the decision of ending an over three decade-old policy that restricted families to having one child: from now on every Chinese family will be allowed to have two children.

Experts say that the new policy is to be considered big news more from a political point of view, than from a demographic perspective. This explains looking at the amount of money the central government has been collecting from fees of those contravening the regulation. According to Beijing’s estimate – which may be conservative when compared to independent analysis – the government used to earn the equivalent of € 2.7 billion in fines per year.

With regards to demographic dynamics, this picture also shows that, if such a large number of people were being fined, it means that a lot of families already have more than one child. These includes those who chose and could afford to be fined, and those who were substantially sure not to suffer from repercussions, such as the majority of migrants. Moreover, the one-child policy had already been readjusted several times to include many exceptions: among others, ethnic minority groups, rural residents, couples where one parents is an only child. Therefore, the majority of the Chinese couples who desire a second child already has it, and the rest of them simply might be not interested in having more than one, which is a typical behaviour of families in developed countries.

12164834_11nSo, demographically, the change is unlikely to have a major impact. This is not good news for the country, which has seen its population growing more slowly than expected. In fact, the previous five-year plan predicted a population of 1.39 billion in 2015, with a growth rate of 7.2 percent. The actual figure shows that the number should present at the end of the year a fall of 15 million below that number, representing a growth of 5.2 percent.

This adds to the raising concerns that Chinese population seems to be aging rapidly, more rapidly than the government predicted. According to the South China Morning Post, the share of population which is considered as potential workforce – between ages of 16 and 59 – dropped by 3.7 million form the end of 2013 to the end of 2014. Alongside, the population of over-60 grew by over 10 million, representing 15.5 percent of the total Chinese population. The question Chinese leaders are trying to answer is now: when do low fertility rates become a serious problem for a country?

Population growth in China has been underestimated since the 10th Communist Party Plenum of 2001. However, even if the trend has been obvious for some time, the speed of change seems to have caught Beijing by surprise. What should the Communist Party leadership do to stem the tide of population aging and decline? So far loosened restrictions have not translated in an increase in growth of the country’s population.

Meanwhile, another related issue has recently gained a spotlight, with a Chinese economist responding to the critics of his proposal to let Chinese men share a wife. According to Xie Zuoshi – this is his name – this options might represent a solution for the country’s gender imbalance, with a sex ratio at birth of about 117 boys for every 100 girls. Mr. Xie argues that poor men – who are facing a shortage of women, especially in isolated rural areas – should be allowed to marry the same wife. In answering to the critics, he said that “in the final analysis, there isn’t much chance this will be legalized. But in economically underdeveloped regions, polyandry is in fact happening even if the law doesn’t permit it. So these de facto marriages are deprived of legal protection.”

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