China's Family Planning Goes Awry--FEER December 2009

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China's Family Planning Goes Awry--FEER December 2009

December 2009

    China’s Family Planning Goes Awry

    by Nicholas Eberstadt

    Posted December 4, 2009

    China's "One Child Policy" is the mother of all social experiments in our modern era. Enforced by the power of a police state for three decades running, this astonishingly ambitious program aims to achieve nothing less than the wholesale transformation of childbearing patterns of the largest country in the world. Through locally determined birth targets, vigilant surveillance of prospective mothers, and state pressures ranging from the threat of job loss to crippling financial penalties and involuntary forced abortion, the policy has already driven China's birth rate far downbelow the replacement levelin the name of accelerating the

    country's economic development.

    By the lights of planners in Beijing, this program has been a glorious success. On the eve of the One Child Policy in 1978, China's total fertility rate (TFR) was on the order of three births per woman per lifetime; well above the replacement level of 2.1. There is some uncertainty about China's fertility levels todaynot least

    because of the incentives to conceal birthsbut there is no doubt that childbearing nationwide is now far below

    the replacement level, and has been for around two decades. Both the United Nations and the U.S. Census Bureau estimate China's current tfr at about 1.7 to 1.8; some put it at 1.6 or even lower. In China's largest metropolitan areas, such as Beijing, Shanghai and Tianjin, women today may be averaging less than one birth per lifetime.

    But social experiments always have unintended consequences. In the case of China's One Child Policy, these consequences are now becoming evident, and are no less breathtaking in scale than the dreams entertained by the coercive visionaries in Beijing who set this scheme in motion. Inexorablyand by now inescapablya host

    of new and unfamiliar demographic problems have arisen, all of which will plague China's next generation. These problems will compromise economic development, strain social harmony and place the traditional Chinese family structure under severe pressure; in fact, they could shake Chinese civilization to its very foundations.

    The End of Labor Force Growth

    China's explosive economic growth between 1979 and 2008 was historically unprecedented in pace, duration, and scale. A repeat performance over the coming generation is most unlikely for one simple reason: the demographic inputs that facilitated this amazing first act are no longer available.

    Over the 1980-2005 generation, China's working-age populationdefined here as the 15- to 64-year-old

    groupgrew by about 2% per annum. Yet over the coming generation, China's prospective manpower growth rate is zero. By the "medium variant" projections of the United Nations Population Division (UNPD), the 15- to 64-year-old group will be roughly 25 million persons smaller in 2035 than it is today, and by 2035 it would be dropping at a tempo of about 0.7% per year. In fact, by the U.S. Census Bureau's reckonings, China's conventionally defined manpower will peak by 2016 and will thereafter commence an accelerating decline.

    Though these forecasts concern events far in the future, they are more than mere conjecture; virtually everyone who will be part of China's 15- to 64-year-old-group in the year 2024 is alive today. If current childbearing trajectories continue, by the UNPD's reckoning, each new generation will be at least 20% smaller than the one before it.

    These numbers alone would augur ill for the continuation of rapid economic growth

    in China, but the situation is even more unfavorable when one considers the shifts

    in the composition of China's working-age population. In modern societies, it is the

    youngest cohorts of the labor force who have the best health, the highest levels of

    education, the most up-to-date technical skillsand thus the greatest potential to

    contribute to productivity. In China, however, this cohort has been shrinking for a

    generation, and stands to shrink still further, in both relative and absolute terms. In

    1985, 15- to 29-year-olds accounted for 47% of China's working age population.

    Today that proportion is down to about 34% of the workforce. By Census Bureau projections, 20 years from now it will have fallen to just barely 26% of China's conventionally defined labor force.

    The only reason China's working age population will not shrink more rapidly over the next few decades is because of an enormous coming wave of laborers in the 50- to 64-year-old age range. This group looks to swell by over 100 million between 2009 and 2029, growing from 22% of the working population to roughly 32%. The educational profile of this group is far more elementary than is generally appreciated: according to official

    Chinese census data, 47% of 50- to 64-year-olds have not completed primary


    With this coming "age wave," the structure of China's labor force will be inverted.

    A generation ago, there were nearly three times as many younger workers as older

    workers. Today there are half again as many younger workers as older ones. Two

    decades from now, the Census Bureau projects 120 older prospective workers for

    every 100 younger ones (at which point the situation may then stabilize, depending

    upon fertility trends). It's not exactly an ideal transformation in the labor force

    structure if one is aiming to maintain rapid rates of economic growth.

    The situation might be easier for economic planners to cope with if China were still a nation with an abundance of underemployed labor. But policy makers in Beijing can no longer count on these once huge reserves. Instead, leading Chinese economistsamong them Professor Cai Fang, director of the Institute of Population and Labor Economics at the Chinese Academy of Social Sciencesargue that the Chinese economy has already reached a

    turning point where those seemingly unlimited reserves of rural labor have actually been tapped out, and any future increase in demand for labor will only be supplied by increasing wages.

    The Senior Tsunami

    It is not only the Chinese workforce that will be aging over the coming generation. By any yardstick, Chinese society overall will be graying at a rapid pace. This is yet another unintended consequence of the population control program, since sub-replacement fertility levels necessarily reduce the share of young people as a fraction of overall population.

    According to the UNPD's projections, China's 65-plus age group currently numbers around 110 million. Over the coming generation, this group is set to rise to 280 milliongrowing at a pace of almost 3.8% per annum. By

    2035, nearly one in five Chinese will be 65 or older, constituting a staggering 280 million senior citizens. The aging situation is likely to be even more acute in the Chinese countryside due to the ongoing migration of younger, rural-born workers to towns and cities. According to the projections of a team of demographers led by Professor Zeng Yi of Peking University, China's rural areas are probably already grayer than its citiesand the

    difference will grow starker every year. Prof. Zeng's team projects that by 2035 over one in four rural residents would be 65 or older.

    What are the implications of this gray population explosion? For benchmarks, we might consider Japan, which ranks as the world's most aged society. In Japan today, the 65-plus proportion of the country's total population is just over 22%. In other words, rural China will be substantially more elderly than any population known to date within a generation.

    Despite three decades of dizzying economic growth, rural China remains terribly poor. Average income levels in the Chinese countryside are reportedly less than one third as high as that of Chinese cities. Japan's per capita income level today is maybe 15 or 20 times higher than in rural China. One need not be a Sino-pessimist to suggest that Chinese society will have to cope with its coming age burden on vastly lower income levels than Japan or today's graying Western societies.

    Who will care for this looming wave of retirees? Certainly it will not be the country's existing pension system. That irregular and arbitrary patchwork construct consists mainly of special arrangements for employees of certain municipalities and state enterprises, covering only a fraction of the country's workforce. Yet even these existing programs are manifestly unsound from an actuarial standpoint. Whereas the net present value of the U.S. social security system's unfunded liabilities are equivalent to America's total output for about one third of a year, the estimated liabilities of China's system are in excess of 100% of GDP. The existing social security system is doomed to collapse under its own weight.

    The traditional Chinese social security system has in fact always been the family, with family members looking after their elderly in countryside and city alike. But with the collapse of Chinese fertility below replacement levels in the 1990s, the Chinese family has become a much frailer support system. In Confucian societies, the first line of support has always been the son. In the 1990s, practically every Chinese woman approaching retirement age had at least one son to turn to: in that time, all but 8% of Chinese women who were reaching the age of 60 had given birth to at least one male child. By 2025 the corresponding proportion of older women who have borne no sons will increase to about 30%, meaning that one in three elderly couples will have no sons as they head toward retirement age.

    For many of these individuals, eking out sustenance in old age may amount to a begging game, whereby they beseech the families of their daughters and sons-in-law to divert resources that would otherwise be committed to the son-in-law's parents. Yet even for those who do have a son, support from one's progeny will require that the traditional ethos of filial piety holds firm; a presumption that may no longer be taken for granted in a country whose lifestyles and mores are undergoing rapid change.

    Within China today, most people have become accustomed to the notion of the country's inevitable rise in the decades ahead. However, the vulnerabilities of its aging population also cast much of China on a course of increasing peril.

    The Emergence of Unmarriageable Men

    In any ordinary human population, there is a predictable regularity to the number of baby boys and girls born. Depending on the society and circumstances, that "sex ratio at birth" (SRB)or baby boys per 100 baby girls

    typically ranges between 103 and 106. Since the advent China's One Child Policy, however, these biological norms have been smashed and the country's gender balance has headed off in an eerie and utterly unfamiliar direction.

    After China's 1982 census, demographers noticed something strange about the country's population count; according to the results, the nation's SRB was almost 109. As the decades passed, this reported gender imbalance only grew wider. By the 2005 "mini-census" China was reporting 119 baby boys for every 100 baby

    girls; for children between the ages of 1 and 4, the officially registered sex ratio was 123. In a number of provinceswith populations the size of large European statesSRBs even exceeded 130. For first births,

    China's reported SRB was almost normal, but for second and later births, the SRB hovered near the biologically impossible level of 150. Evidently, Chinese parents were more or less willing to let nature take its course the first time around, but were intervening to assure the sex of any successive child.

    China is not the only country in the modern world to report unnatural sex ratios at birth; South Korea, Taiwan, Singapore and parts of northern India are places where SRBs have risen above 108 in recent years. In all of these settings, the strange imbalances appear to be due to a confluence of three factors: an overpowering preference for sons; low or sub-replacement fertility levels (making the gender outcome of each birth more significant); and the availability of gender determination technologies like ultrasound, which facilitates widespread sex-selective abortion. In China today, however, SRB disparities are more extreme than in any other country on earthand there is little doubt the imbalances are largely due to the One Child Policy. Professor Zeng has suggested that the policy may be responsible for as much as 10 points in China's SRB. Today's surplus baby boys will be tomorrow's prospective bridegrooms. Chinese culture strongly upholds the practice of marriage, but this is an arithmetic impossibility for the next generation of males. A marriage squeeze of monumental proportions is in the works for Chinaa society which depends highly upon family harmony to

    assure social stability. Calculations by Professor Zeng and his colleagues point to the magnitude of the problem. Today, roughly 5% of Chinese men in their late 30s have never married. By 2020, that fraction could exceed 15%, and may reach 25% by 2040. The situation will be more extreme in the countryside, since rural men are more likely to lose out to more affluent and educated urban suitors in the national marriage race. By these same calculations, in 2020 about 20% of China's rural men between the ages of 35 to 44 will never have taken a bride, and the proportion rises above 30% by 2040.

    How will Chinese government and society function in the face of this rising tide of unmarriageable young men, an able-bodied but very likely disaffected cadre drawn disproportionately from the countryside and the urban poor? Speculating about this is almost like imagining the end to a science fiction storythe drama takes us into

    a universe whose coordinates are far removed from the world we know. Even so, what may be hardest of all to imagine is that at the end of the day, this profound demographic disjuncture would leave China's economy, society and polity altogether unaffected.

    Brave New Family Structures

    The most far-reaching implications of the many demographic changes inadvertently promoted by the One Child Policy, however, may not concern those who cannot find a spouse. Instead, they may entail a revolution in family structure for those who do manage to marry and have children. With the advent of steep sub-replacement fertility rates, single-child families are increasingly common, a trend which may portend the demise of the extended family network and the rise of a peculiar new pattern: only children begotten by only children. In such families, children will have no siblings, uncles, aunts or cousins. Their only blood relatives will be ancestors and descendants.

    Research by Professor Guo Zhigang of Peking University and his colleagues suggests how far China has already moved toward this new family type. By their estimates, as of the year 2011, nearly a quarter of China's urban adults between the ages of 25 and 49 will be only children. By 2020, this figure would rise to 42%, and by 2030, they would constitute the clear majority at 58%.

    The emergence of what we might term the "kin-less family" is expected to pose extraordinary challenges. After all, Chinese culture is predicated on the existence of robust and extensive family bonds. Yet the inherent problems in this impending revolution are not solely metaphysical; the atrophy of the traditional Chinese family structure will also complicate the Chinese way of doing business.

    In the past, China was what Professor Francis Fukuyama of Johns Hopkins-SAIS has termed a "low-trust" society. It remains one today. To overcome this lack of confidence in laws and official institutions, Chinese entrepreneurs and economic agents have relied upon informal relationships (guanxi) to get things done. These

    informal networks have served to lower both risk and transaction costs for the parties associated with them. They have, in fact, been an integral and often unacknowledged ingredient in China's economic success over the past three decades. Yet with the advent of the "kin-less family," many rising, young economic and political actors will no longer be able to count on blood ties in their quest to conduct secure transactions. What will become of Chinese economic performance when this key element of the country's growth formula is radically altered? One can of course imagine compensating social adaptations, such as a more reliable rule of law or deeper affinities to friends. But if history is any guide, such social adaptations are often slow and halting, and there is no guarantee that they will emerge in time to remedy the loss of social capital that is taking place before our eyes.

    In detailing China's looming demographic troubles, I do not mean to suggest that continued, even substantial, material progress is not in the cards for China in the decades ahead. The Chinese economy still has tremendous opportunities for further growth. At the same time, we should not underestimate the magnitude of the demographic difficulties with which China will have to contend in the years ahead. Unfortunately, those difficulties do not yet seem to have been adequately recognized, either by the international community or by Chinese leaders themselves.

    There is more than a little irony in this situation for the masters of today's Chinese economic miracle. In their autocratic, but seemingly pragmatic quest to escape the poverty that burdened China in the past, they have helped conjure up demographic demons that will bedevil the country for decades to come. Deng Xiaoping is currently remembered for his steadfast opposition to Mao's disastrous Great Leap Forward. But history may ultimately remember Dengand his successorsfor unleashing a population control program whose toll on the

    Chinese people would put the Great Leap Forward in the shade.

    Mr. Eberstadt holds the Henry Wendt Chair in political economy at the American Enterprise Institute in Washington, D.C., and is senior adviser to the National Bureau of Asian Research. This essay draws upon remarks before the Tom Lantos Commission on Human Rights of the U.S. Congress last month.


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