Between 1980 and 2015, China sought to push back the danger of over population with the “one child” policy.[1]  Birth rates dropped from about 23/1,000 in the mid-1980s to about 13/1,000 by 2005.[2]   Still, this left a lot of young people in the pipeline. 

            In 1990, about two-thirds of the Chinese population were between 15 and 64 years old.  A huge demographic shift took place over the next twenty years.  The share of those aged between 15 and 64 rose to 75 percent.  Essentially, young people with few dependents flooded out of the countryside into the labor market of coastal cities.  At the same time, China entered the world market.  A world in search of cheap goods produced by labor-intensive industries encountered a huge and growing Chinese labor force. 

By 2005, birth rates had stabilized at the lower level.  Now the share of the population of working age is falling.  Worse still, the fertility rate (1.3 children per woman) has fallen below the replacement rate (2.1 children per woman).  This portends a host of decisions. 

Some are economic.  Productivity gains from moving peasants from rice paddies to factory jobs will be reduced.  The growth in the absolute size of the labor force will slow.  The price of labor will be bid up, one way or another.  Automation offers one response.  Will the government invest resources in the technology that is required?  Moreover, “what China makes, the world takes.”  Will labor shortages drag on China’s ability to produce for export? 

            Some are social.  Generally, the young labor migrants left behind middle-aged parents who were still working.  Now, ten to thirty years on, those young migrants are themselves middle-aged and their parents need care and support.  Some 18.7 percent of the population is 60 or older.  This adds to the problems of working children.  Similarly, China’s efforts to get people to have more kids merely adds to the problems of working parents.  All this may pull people away from a tight focus on work. 

On the other hand, having built a culture of long hours on the job, China may have a difficult time changing the minds of managers and of workers.  Will China invest resources in creating systems of child-care and elder-care to enable productive workers to keep working long hours?  Will it make robust investments in education to address he concerns of parents?  Will it offer financial inducements for more children?  Vague promises of new measures accompanied the announcement of the new policy. 

Some are political.  One thing high-lighted by the announcement of the three-child policy is the degree of defiance of the government on a deeply personal matter.  One story quoted both a woman insisting that she wouldn’t have any children and another relieved that her previously-illegal third child could now come out of the shadows.  In this environment, the pretensions of an authoritarian state rankle, while its admission that a policy rigorously pursued for seventy years had unforeseen consequences can only make people wonder what else it has gotten wrong. 

            It isn’t clear yet if there is a sweet spot where all solutions align. 

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[1] Nathaniel Taplin, “China Baby Bust to Be Felt Globally,” WSJ, 2 June 2021; Sui-Lee Wee, “China Will Let Families Have Three Children,” NYT, 1 June 2021. 

[2] See: https://en.wikipedia.org/wiki/One-child_policy  When an authoritarian state imposes such a policy, many grim stories follow.  In 2016, China adopted a two-child policy.  This failed to slow the slump in population growth.  In 2021 it adopted a three-child policy.