China may soon allow all couples to have two children, a move that would finally end the country’s long-standing one-child policy, according to a leading economist and policy adviser responsible for drafting the country’s next five-year plan.
The plan is expected to be unveiled later this week following high-level closed-door political meetings in Beijing. Analysts said a two-child policy, while a welcome move, will do little to help lift the country’s declining birth rate or shrinking workforce.
According to a report in the English version of the official China Daily newspaper, a change to the country’s family-planning policy is among a number of other social policies that the new plan will address.
Hu Angang, a professor at Tsinghua University’s school of public policy and management, told the China Daily that if the changes are approved, “all couples will be encouraged to have two children.”
The planned two-child policy will be a further relaxation, after China, in late 2013, allowed couples, one of whom has no siblings, to have a second child.
Childrearing desire eased
China first instituted its one-child policy in 1980 in a bid to control the country’s population, which is the largest in the world. But heavy-handed enforcement of the measure, including forced abortions, has long been a source of controversy outside China. More recently it has been blamed as a reason why the country’s workforce is shrinking at an alarming rate.
“Even if two children are allowed, too many young people in the cities are probably no longer interested in having a second child,” said Jiang Quanbao, a professor from Xi'an Jiantong University's Institute for Population and Development Studies.
“Relatively speaking, people in rural farming villages may be more interested," he added. "But again, some of them are already allowed to have two children."
A total of 19 rural provinces in China have already launched a partial two-child policy, which allows couples to have a second child if their first newborn is a girl so as to address the nation’s gender imbalance.
Demographic dividend dead end
With a population of 1.37 billion, China’s total workforce by the end of last year was a massive one billion strong, with some 800 million participating in the job market. But beginning this year, the Chinese Academy of Social Sciences estimates that the market will lose as many as 1.55 million people every year before 2020, 7.9 million between 2020 and 2030, and as many as 8.35 million between 2030 and 2050.
Such a steep slide in the workforce is expected to put a lid on the nation’s demographic dividend and its role as a source of cheap labor.
“The cost of labor in China has greatly increased, which hurts the nation’s status as the world’s factory," Jiang said. "With a higher labor cost, international investors are sure to favor other countries over China.”
Even with a new two-child policy, it will take another 20 years before the next wave of baby boomers could help ease the labor shortage problem, the professor added.
Making things worse, the current working population from rural provinces is forced to exit the job markets in the cities earlier than expected as a result of rising property prices and the nation’s rigid household registration system.
That has created bigger hurdles for the nation’s labor force to be fully utilized, said Ran Tao, director of the China Center for Public Economics and Governance at Renming University.
“If both the land and household registration reforms can be pushed forward, the labor-force shortage can be easily alleviated by the full utilization of the working population from rural provinces," Tao said. "This will be a quicker fix than the implementation of the two-child policy.”