How Abolishing Birth Limits in China Improves the Economy
As government officials convene in Shaanxi to discuss abolishing the birth limit in China, they are also beginning to understand just how the one-child limit has affected the economy, for better or for worse. Over the past three years, the Chinese government has worked towards eliminating the one-child limit and repurposing it to a two-child limit. However, in a recent reversal for the Communist Party, Chinese government officials are currently drafting ways to in fact increase childbirth and population growth, thereby abolishing birth limits in China.

The One-Child Policy in China

When Chinese leader Deng Xiaoping proposed the one-child limit in 1979, he catalyzed a series of unintended social and economic implications. At the time, China was facing major food and housing shortages. Due to its exponentially growing population, hundreds of thousands of people were entering a state near poverty.  To combat these shortages, the one-child limit was placed on the people of China. Suddenly, China’s annual population growth rate dropped to a mere 0.6 percent.

Since 1980, China has been a global hub for economic expansion. In fact, decades of China’s economic boom have lifted hundreds of millions out of abject poverty and sent over 100 million men and women to college. However, recent studies attribute the economic boom not to the stagnant population growth rate, but rather to reform policies that loosened state control over the economy.

Consequences of Limited Population Growth

In fact, fertility rates have decreased to 2.1 in China, partially due to the birth limit and partially due to socioeconomic and cultural transformations, such as later marriage, postponing childbirth to pursue careers, longer birth intervals and fewer births. Researchers suggest that these transformations are not localized to China since countries that had similar fertility rates to China in the 1970s experienced the same decrease in fertility without a strict birth control policy.

The 1980 one-child limit was intended to be a temporary measure to alleviate economic pressures at the time. However, it lasted for decades, shaping an entire generation of people. Perhaps the most tangible effect is that of the aging workforce. China’s level of productivity, measured in output per hours, is at its lowest level since 1999. According to the International Monetary Fund, the number of people in their prime working age (ages 15 to 59) will decrease by almost 200 million over the next three decades. Because the labor force is dwindling, this can pose major pressures in economic and social development.

Changing Policy

Despite the negative impact of the one-child limit, Chinese officials are trying to reverse the effects by lifting strict birth control measures and abolishing birth limits in China. Just in the past three years, ever since the passage of the “two-child” policy, China has seen the percentage of families with two children increase from 36 percent to 51 percent. The National Health Commission claims that the “two-child” policy is working, as it encourages families to not be bound to just having one child.

Additionally, local governments are taking several steps to promote childbirth as the state governments work on policies such as education and housing subsidies and investments in clinics and preschools. These initiatives, coupled with officials’ proposal of abolishing birth limits in China, will help facilitate a better working economy for China.

– Shefali Kumar
Photo: Flickr

income gap in china
The Chinese economy has grown tremendously and continues to expand, bringing fortune to the country and its people. Destination sites are seeing this expansion via an increase of Chinese tourists. The growth is exciting as the generations change from barely surviving to having expendable income. However, there is still an income gap in China that must be faced. Anyone traveling from the city to the countryside can see the disparity in wealth.

The Chinese economy really started to make a turnaround when Deng Xiaoping became the country’s leader in 1978. He began implementing major economic reforms that caused the economy to boom in such a way that its growth averages around 10 percent a year. This average is three times higher than the development of any other country. These economic reforms changed China so quickly and brought so much wealth to the country that the world began to take notice. China began purchasing and buying in other countries and became the world’s biggest exporter in 2009.

While this brought huge amounts of wealth into the country and changed many people’s lives, it also left others behind. In 2016, only 1 percent of Chinese citizens held over one-third of Chinese wealth while the poorest quarter held only 1 percent of Chinese wealth. A look at cities versus the countryside reveals the income gap in China. A visit to one of China’s great cities such as Beijing, Shanghai or Xi’an reflects China’s great innovation, but a quick drive to the countryside will find ramshackle homes that have been poorly repaired with cheap scraps.

This disparity can seem overwhelming and appear that, despite China’s prosperity, many are left in poverty. Thankfully, this is not necessarily the case; the poverty rate decreased from 26.7 percent in 1998 to 13.8 percent in 2010. China’s growing economy also means a growing middle class. From 2002 to 2012, China’s middle class grew by over 25 percent. However, this quick growth has caused a great migration into cities, which has left some cities ill-equipped to handle the large influx in population, and the countryside with little financial stability or ability to maintain infrastructure, as well as shooting up the cost of living in urban areas.

As of 2016, people living in cities made 2.7 times more on average than those in the country. The main problem of inequality lies with geography. Restrictions have been put in place that prevent or limit those living in the countryside from relocating or selling their homes. However, despite these problems, the incomes of those in the countryside have grown tremendously during the last four years. The current leader, Xi Jinping, has put particular pressure on various areas of business and government to clamp down on corruption, which has had a positive impact on breaching the inequality between citizens, as well as improving healthcare, education and welfare.

The income gap in China does still exist, but the redistributive policies have reined in the corruption and created an awareness for those with little social mobility. Rural areas are still lagging behind, but if one thing is true, it is this: lives are improving. Chinese citizens are able to travel, the middle class is growing and the government is taking notice of inequality. While China still has some steps to take, the last 30 years have shown how dramatically China can progress and use policy to enhance its citizens’ lives.

– Natasha Komen

Photo: Good Free Photos