China’s Birth Rate Is A Cost, Not Numbers Problem

IT STRIKES THIS Bystander as odd that China’s decision to switch to a three- from a two-child policy is being described as a surprise. Demographic data does not change that quickly. That the country faces a reversal from its demographic dividend to a demographic deficit with the ageing of its population has been known for many years.

True, the 2020 census gave the inevitable decline of population growth as economies get more prosperous and more urbanised a new urgency. The 12 million new babies born last year were the least since 1961 — and two-thirds the level of 2016 when Beijing ended its one-child policy. 

The impact of the pandemic on couples’ willingness to have children may not be fully apparent yet. Nonetheless, a birth rate declining even faster than the mortality rate may mean the population will begin to contract in 2025. That is sooner than expected, with the economic impact of having relatively fewer workers to create output and to pay the taxes to care for the elderly.

The other question is whether allowing couples to have a third child will reverse the long-term trend. Allowing them to have two has had little effect. More significant deterrents to larger families are the high cost of childcare, education and housing.

Policymakers need to address those if they are to get the fertility rate up. It is another reason that Beijing needs to hark the calls of those, including most recently the OECD, to take advantage of the pandemic to push through structural reforms that will increase social protections.

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One response to “China’s Birth Rate Is A Cost, Not Numbers Problem

  1. Pingback: Three-Child Policy Will Struggle To Raise China’s Birth Rate | China Bystander

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