Antoaneta Bezlova
BEIJING, Mar 17 2006 (IPS) – Fixated on maintaining the country s high-powered economic growth, Chinese policy makers have been soliciting opinions from economists about how to avoid future labour shortages by relaxing and even scrapping the rigid one-child policy.
But the effort has generated a debate over a 25-year-old family planning policy that was once considered sacrosanct. Population experts have clashed with economists about what path China a nation of 1.3 billion with scarce farmland and water supplies, should take to maintain a healthy economic growth and delay the arrival of a greying society without creating another population explosion.
China s one-child policy, which the government started implementing from 1979, is widely unpopular inside the country. In the West, it has been criticised for being prone to abuses with local officials using coercion and forced abortions to enforce their state mandated family planning quotas.
But despite popular hostility the government credits the policy for successfully controlling growth of China s already huge population, and says it would have at least 300 million more people today if it were not for the policy.
The government s confidence, however, has been dented by a series of studies in recent years and demographic evidence suggesting that because of the low birth rates China is growing old too early and too fast.
Fears have risen that rapid increase in aged people would put a strain on working-age population and slacken economic growth. As China s baby-boomers of pre-1979 start retiring, there will be fewer young people of working age to take their places and fuel the country s economic powerhouse.
For 20 years China benefited from its demographic dividend but now we anticipate that around 2015, this dividend would turn into deficit, says Cai Fang from the Population and Labour Economic Research Institute under the Chinese Academy of Social Sciences.
Cai s research credits the surge of number in working-age people, or what he calls the demographic dividend , with contribution of 24 percent to the economy s growth between 1978 and 1998. But Cai predicts that around 2013 China would see its working-age population growth coming to a halt and might begin experiencing labour force shortages.
We are currently witnessing the transformation of China into an unprecedented ageing nation, Li Keping from the National Social Security Fund Executive Council told a recent meeting on family planning policy where various population and economic experts gathered. What is unique about China s case is that the ageing process is happening before the country has grown rich and it is happening too fast.
Chinese economic planners estimate the country would reach its well-off threshold, or what in Chinese is termed xiaokang (comfortable living) in 2020. But a national census conducted in 2000 concluded that China had already crossed into the phase of a rapidly greying nation.
In 2000, people aged 60 composed 10 percent of the population and their numbers were growing by three percent a year. The demographic state of China that year fitted nicely the United Nations definition of an aging society a country, or a region where people aged 60 make up 10 percent of the overall population.
What is more, the numbers in China are rising fast. Chinese demographers predict that if current population trends persist, by 2035 people aged 65 and over would compose 20 percent of the population.
China s national wealth however, would not be a match to shoulder the burden of a rapidly greying nation. In 2030, China s annual per capita income will be about 11,000 US dollars measured in current prices, according to a study by Goldman Sachs Group in Hong Kong. This would compare with almost 36,000 US dollars of annual per capita income last year in Japan another rapidly ageing Asian society.
With fewer workers supporting growing numbers of elderly, the strain on severely underfunded social pension system is expected to grow. The pension system currently only covers urban Chinese, not rural dwellers who make up the majority of the population.
Even so, the World Bank estimates that only 160 million urban people, or less than 15 percent of China s working-age population at the moment, are covered by the social security net.
Feeling insecure about their retirement age, Chinese people are saving at rates that economists fear might in the future starve the economy of investment and consumption spending. From 1990 till 2001, the World Bank says, China ranked number one in the world in terms of family savings.
But while both economists and population experts agree that a rigid implementation of the one-child policy is becoming economically counterproductive, they seem to differ on what to do about it.
The economic lobby, led by prominent economists like Lin Yifu and Hu Angang, insist the policy should be steadily and substantially relaxed to ease labour shortages.
If not, then China, one of whose economic advantages is labour-intensive industries, is bound to lose because of the lack of workers, Lin Yifu, professor of economics at Beijing University told the meeting on family planning policy held at the same university.
Hu Angang, a researcher on economic policies at Thsinghua University, warned that if the current one-child rule remains in place, then by 2050 India would have 200 million people of working age more than China positioning the country at a disadvantage with one of its major economic competitors.
Population experts though, counter that the one-child policy is no longer as harsh as it used to be. In fact, they say, around 30 percent of the population currently are allowed to have two children.
Many rural couples may have a second child, especially if their first is a girl; in the cities a husband and wife who each are the products of single-children families also may have two children.
Some demographers have even accused the economic view of China s population trends as being shortsighted, given the country s lack of land and water resources.
Economists only consider the developments over the next 20 or 30 years, argued Renmin University population expert Wu Cangping. But demographers have to take a longer view and think about the next two or three generations. If we allow the birth rates to go up now, then 60 years from now we would be faced with another baby boom.
