China’s one-child policy hangover

As China’s one-child policy comes to an end, it leaves behind profound
demographic and economic consequences, from an aging population to a glut of
eligible young bachelors.

By: /
7 December, 2015
A man uses his phone to scan a QR code sticker, which is used to share personal information, during a matchmaking event in Jinshan beach, south of Shanghai July 20, 2013. REUTERS/Carlos Barria
By: Henry Lotin

Economist and retired Canadian diplomat. 

As this writer, an accidental occidental tourist, meandered through the expansive garden paths of Shanghai People’s Park (Shanghai Race Club of pre-revolutionary days) on a hot Saturday afternoon in July, emerging through the trees were hundreds of umbrellas and clip boards. Seated behind were parents, grandparents and marriage brokers, representing eligible single men and women from across China. Though happily married myself, I had arrived at the Shanghai’s Marriage Market. Here the unexpected consequences of China’s one-child policy were on display.

On the grass lay resumes, pictures and diplomas describing the attributes of their prospects, while marketers glanced up from their cellphones and tablets, hoping to pitch to window-shoppers along the paths. Behind the trees, people were huddled in conference, talking rapidly and exchanging pictures, also on cellphones. Beside a colourful lily and fish stocked pond, young people paced, sweating in the mid-summer day’s heat. Dressed for prom night, young men were in suits and ties, women in tight or frilly (but not too revealing) dresses, waiting for introductions to possible future in-laws. My heart sank in sympathy as I pondered if being presented like a debutante a century ago at the Shanghai Race Club would have been any less nerve-racking.

I look, bewildered, at the pictures. Women’s photos showed them posing next to human-sized robots, perhaps to show what they might look like in a couple. Men were pictured in front of fancy condos, balconies, fireplaces and liquor cabinets, blatantly conveying to a prospective mother-in-law that they were “eligible” men with (owned) apartments.

The motivations driving this behavior are well understood. Women are in short supply. A longtime preference for male children derives from a rigidly patriarchal Confucian social order, which placed emphasis on having a male heir. While muted under Mao, there has been a resurgence post-1978. This is apparently more pronounced among Han Chinese and in rural areas. Certain ethnic groups, including the Yi minority, exhibit stronger preference towards daughters.

Young male bachelors have taken to great lengths to attract partners. As Mei Fong, former China correspondent for The Wall Street Journal and author of the forthcoming book One Child: The Past and Future of China’s Most Radical Experiment, asks, “What is a Canadian-sized population of bachelors going to do for mates?”

The challenge is more acute for males now entering adulthood, seeking females their age or younger, in increasingly short supply. Young women can choose from a larger pool of males, with fewer social constraints in partnering with an older man.

How did China find itself in this situation? The 1979 introduction of China’s one-child policy was intended to slow overpopulation, when development policymakers were concerned about a ‘population bomb.’ Smaller families facilitated higher living standards. Over 35 years, as fertility rates plunged, China’s demographic curve became deeply skewed. While China claimed that the policy spared 400 million births, demographers say most occurred before the policy was enacted. China now has a large population with far fewer young people to support the old. By 2030, the greyest society with one of the lowest fertility rates in the world, now with five taxpayers for each person drawing a pension, will have a ratio roughly of 2:1. China’s precipitously decline in 16 to 59 year olds is accelerating.

Notably, the pace of these demographic shifts caught Chinese officials by surprise, and is likely to impact the country more quickly than most western media reports to date reveal. Chinese officials now suggest China’s population could peak by 2020, six to 10 years faster than earlier reported.

In a recent Toronto address to the Canadian International Council, Shang Jin Wei, the Asian Development Bank’s Chief Economist, said that the discrepancy of male to female births grew from 1.06/1.0 to 1.22/1.0 from 1979 to 2009. One in nine adult males in China now face the prospect of being an involuntary bachelor, distorting the behaviour of those seeking mates, and their parents.

The announcement of the two-child policy in late October was heralded as a “breakthrough for rational policy-making, and for human rights,” by Willy Lam, a China expert and senior fellow at the Washington-based Jamestown Foundation, in the Globe and Mail.

But caution is called for when projecting the likely impact, given the tepid response to earlier changes. A 2013 policy permitting couples where one parent was an only child to have two children did not result in many new births. By May 2015, only about 1.45 million couples, around 12 percent of those eligible, had applied to have a second child under the 2013 rules.

Many Chinese couples are simply not interested in having larger families; a trend reflected in most developed countries. But the policy has also driven up dowry costs dramatically, resulting in 500,000 Beijing women perversely unable to find partners.

Shang Jin Wei of the ADB said that the abundance of involuntary male bachelors make them more determined to take risks to get rich, accumulate more savings and be entrepreneurs. The situation also prompts parents to push their children to do the same. The resulting surplus of males has also led to higher crime rates, and high incidences of depression and illicit drug use.

In rural areas, where policies or lax enforcement have long allowed at least two children, elderly relatives care for millions, while parents toil in cities. About 200 million rural citizens live in major cities. Permitted to have larger families, they were forbidden to enroll their kids in urban schools.

Furthermore, at best a two-child policy will result in fertility rates still well below replacement level, and any growth today will take a generation to affect the labour force. The dependency ratio of workers to pensioners will soar in the interim.

With over 100 million families with only one child, will an entitled, coddled generation be created? What happens when they grow up and must shoulder support of ailing parents, in-laws, grandparents, in a nation with more than half the world’s Alzheimer and Parkinson sufferers?

What does a declining labour force mean for the Chinese economy? In every year forward China will require higher per capita incomes for the economy just to remain static. Chinese investment elsewhere in Asia and in Africa, where young labour is cheaper and more plentiful, signals a shift of labour intensive, low-value-added manufacturing out of China. Retail sector staffing will need to decline and accommodate more pensioner-aged staffers.

Can growth through productivity gains keep up with expectations? Will Chinese workers be satisfied after the exponential growth of the past two generations?

The mobility and affluence of young urban professionals may prompt many bachelors of both sexes to relocate abroad to find partners. Chinese policies already encourage youth to study abroad, and Canada is an increasingly favoured destination.

Will China’s work force decline be exacerbated by highly skilled singles going abroad to seek mates? 

There are lessons for Canada here. Canadians too have expectations for future growth comparable to that of recent past generations and also face rising demographic resistance.

Canada is seeing fewer new entrants to the workforce, and is projecting a decline in the 18-44 population cohort. In Atlantic Canada that reality has already arrived. Quebec’s 18-44 cohort is set to decline by 2020. Saskatchewan and Manitoba will see a similar decline shortly thereafter, followed by Ontario, according to Statistics Canada.

Canada can, with a more gradual demographic shift than China, make relatively modest policy adjustments to stave off this trend. Setting aside considerations to raise natural population, policymakers can also address the decline by increasing our intake of immigrants, refugees and international students.

A relatively modest net migratory increase of about 50,000 annually, targeting a young working age cohort, from current levels of 250,000-300,000, would help most provinces to sustain growth in the 18-44 age cohort well into the next decade.

In China’s case, profound demographic headwinds make dramatically slower growth almost inevitable. Concurrently, expectations of both the economy and the government by an increasingly affluent and globally connected Chinese population are rising. How well policymakers manage these expectations in the face of demographic challenges may be the defining question for China’s future.

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