Why China abandons its one-child policy

35 years after China placed strict limitation on its population growth by adopting the so-called one-child policy (initiated in the late 1970s), China has finally abandoned one-child policy and substituted it with a two-child policy which allows the married couples in China to have up to 2 children starting from Jan 1st, 2016. According to the government statistics, the implementation of the stringent birth control policy has effectively prevented over 400 million births (allgirlsallowed.org 2016). The falling of fertility rates has contributed greatly to the economic miracle in China during the past two decades. Why China abandons its one-child policy now?

A worrying trend in population aging in China

According to UN’s report ‘World Population Aging’, China has a decreasing number of births since the 1990s, which will make its population age faster than many other developing countries (un.org 2013). It is estimated that by 2020, over 23 percent of Chinese people will be over age 65, leading to a big challenge to China’s medical and social insurance system. Along with the aging population is the shrinking labor force. Based on the report published by National Bureau of Statistics, the working-age population in China has been shrinking for 3 consecutive years, and it decreased by 3,710,000 between 2013 and 2014. Thus it is necessary for the Chinese government to abandon the one-child policy to ease the worrying trend in population aging.

Ending of demographic dividend

Many economists believe that the demographic dividend directly resulted from the one-child policy has contributed significantly to China’s rapid economic growth since the 1990s (demographic dividend happens when falling of fertility rates allows a labor force to temporarily grow faster than the population dependent on it). According to the World Bank, the structural advantage of demographic dividend has contributed to more than 30% of China’s total economic growth. However, demographic dividend is now coming to its end. Year of 2013 was considered as the turning point of Chinese population dependency rate. Since 2013, the population dependency rate is decreasing with the spillover effect of direct demographic dividend declining accordingly.

An increasing demographic crisis – the 4-2-1 phenomenon

The 35-year strictly implemented one-child policy creates one of the biggest demographic crisis in the world, in a typical family one young person has to financially support 2 parents and 4 grandparents which is also known as the 4-2-1 phenomenon. Though the abandoning of the one-child policy may not help to fix the demographic crisis in the short-term, it is still considered as a good beginning in solving the problem.

4-2-1 problem

List of reference

allgirlsallowed.org 2016 History of the One-Child Policy [online] accessed on 26th Mar 2016, link: http://www.allgirlsallowed.org/one-child-policy

un.org 2013 World Population Ageing 2013 [online] accessed on 26th Mar 2016, link: http://www.un.org/en/development/desa/population/publications/pdf/ageing/WorldPopulationAgeing2013.pdf

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