Date
20 October 2018
Although relaxed policy led to a jump in newborns last year, China still faces the threat of a shrinking population over the long run. Photo: China Daily.
Although relaxed policy led to a jump in newborns last year, China still faces the threat of a shrinking population over the long run. Photo: China Daily.

Why China’s baby boom may not last long

For China, the first piece of exciting news in 2017 is probably the rise in the birth rate.

According to data from the National Statistics Bureau, a total of 17.86 million babies were born in 2016, an increase of 1.31 million compared to 2015 and marking the highest such level since 2000.

China’s population policy has gone through tremendous swings since 1949.

In the 50s, authorities encouraged people to have more babies as it was deemed necessary to boost the nation’s manpower resources. The population soared to over 1 billion from 600 million within 20 years, much more than the economy was able to support.

The huge economic burden left Beijing with no choice but to switch to the other extreme—the imposition of rigid one-child policy regime.

Many pregnant women saw themselves being forced into abortions. The birth rate quickly fell off the cliff.

Sensing the threat, authorities decided to relax the family planning policy in October 2015 and allowed all couples to have two kids. The number of newborns started to pick up last year.

While alleviating the population aging issue, newborns would also become a stimulus for demand of all sorts, including items such as infant formula, diapers, strollers, education services and housing.

But the long-term picture remains dire.

China’s total fertility rate remains at 1.6 per woman, which is still far from the level of 2.1 needed to maintain a stable population.

It is estimated that China’s population would reach a peak of 1.45 billion in 2018, and then slump to 600 million at the end of this century. By then, more than half of its population would be over 60. If so, who would use facilities like housing, shopping malls and high-speed railway the country is busy churning out now?

In fact, regions that have the lowest fertility rates are all dominated by Chinese population. That includes Hong Kong (1.19), Taiwan (1.12), Macau (0.94) and Singapore (0.82), according to US data.

China’s fertility rate already falls close to that of Canada and eurozone, and is even lower than that of France (2.07), UK (1.89) and US (1.87). That’s why some fear China could get old before getting rich.

Interestingly, up to 45 percent of the 17.86 million newborns last year are second children in the family, implying that young couples that have yet to have the first child are not so eager to become parents.

If so, the baby boom may only last for a couple of years, and the number of newborns may fall off again when most couples who want a second child have already fulfilled their goal.

So what can the government do? It can perhaps loosen the policy further and allow eligible couples to have as many kids as they prefer.

Authorities should also tackle issues like air pollution, housing, education, healthcare and welfare system in a bid to make it easier and safer for people to raise children.

This article appeared in the Hong Kong Economic Journal on Jan. 24

Translation by Julie Zhu

[Chinese version 中文版]

– Contact us at [email protected]

RC

Hong Kong Economic Journal columnist

EJI Weekly Newsletter

Please click here to unsubscribe