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The relaxation of China's One Child policy, which came as one of the decisions of Third Plenary Session of 18th CPC Central Committee, has been welcomed with much fanfare. While this decision may be celebrated as the new government's feat at socio-economic policy-making, in fact, this was an indispensable view of China's demographics and government's exhausting capability to deal with it.
According to the proposed policy, couples in which one member is an only child will be allowed to have two children. The policy is slated for implementation from January, 2014.
One Child Policy was never sacrosanct and has been reformed from time to time. Looking back, Chairman Mao Zedong (founding father of the People's Republic of China) had a vision of transforming China from an agrarian economy to an industrial one. His plan was to apply demographic dividend of abundant cheap labour to run the engines of massive production. And population boom went unabated till 1976 when Mao passed away.
Deng Xiaoping (reformist leader), who succeeded Mao, had to provide food, education and employment to this bulging population. So, he had to launch One Child Policy in a desperate attempt to control population. However, after a decade of population control and opening up of the economy from the late 1970s, China had double digit growth, powerful private enterprise, high life expectancy, low fertility rate, ageing and dwindling workforce and low social security benefits. Then in mid-1980s, responding to heightening backlash against this policy and government's failure to provide adequate social security, the government allowed rural couples with only a girl to have a second child. Much later, couples who were both only children were allowed to have a second child.
Overpopulation is a problem faced by many developing countries, but what makes it peculiar in China is that here a smaller generation is following a boom generation. The 4-2-1 phenomenon applies here wherein a single child approaching working age has to take care of 2 parents and 4 grand-parents in retirement. China's Old Age Dependency ratio (UN data, 2010) is 11.3. It is estimated that by 2050, more than a quarter of the population in China will be over 65 years. These reinforce the idea that China may grow older before it grows rich.
There are ramifications of China's inverted pyramid shaped population structure narrowing down at the cohort of workforce. The massive rural-urban migration due to concentration of factories in cities has left the old aged people in rural areas. Moreover, the Hukou (house registration system) restricts rural people to acquire properties in cities. Therefore, the migrant workers live on the brink of all convenience and comfort of cities and cannot bring their parents along.
The Third Plenum aims to reform the Hukou system but in that case the rural-urban migration will continue to gain momentum. A World Bank report shows that the elderly living with adult children has dropped from 70% to 40% in the period 1990 to 2006. China's unfunded pension liability stands at 150 % of the GDP. Providing medical care and upkeep services for elderly is a major challenge for the successive governments. Pension is a largely fragmented system in China. While urban workers are covered under corporate insurances, their rural counterparts have lesser old age benefits although they retire late.
The Chinese government has revised law on the Protection of Rights and Interests of Elderly People in July, 2013 which requires family member to visit their elderly at frequent intervals. This law is still shrouded in controversy. Although this law reinforces Confucian tradition of filial piety, radical communism followed by rampant capitalism in China has frayed the ties that had bound Chinese families together. If on one end of the spectrum are old aged, on the other are abandoned children. Earlier this year, cases of child abandonment had jolted the nation when fire-fighters rescued a baby boy from toilet pipeline after he was flushed down in commode or much later babies were rescued from trash cans. In June, 2013 China has officially banned private adoption of abandoned infants. Earlier this month, Nanjing Welfare Centre in Eastern China created a baby dumping centre where parents may anonymously abandon their children. The reasons behind banning adoption of abandoned children and creating dumping centres for them are contradictory. The first is a deterrent to those parents who believe their abandoned children will be adopted, the second encourages their abandonment as the government will take care of them. Perhaps, state wants to bolster its paternal-welfarist image.
The recent reform in One Child Policy is not capacitated to address some of the demographic imperfections of the country. The sex-ratio (UN data, 2012) is 108. Given the gender imbalance, by end of this decade, it is estimated that 30 million young men will have no realistic hope of finding Chinese spouse. 336 million abortions and 222 million sterilisations (from 1971- 2010) are recorded since the inception of One Child Policy. Women of child bearing age (15-49) constitutes 56% of total women population. Thus, despite the recent reform, the chance of a sizeable workforce in the near future seems highly unlikely. Under the proposed reform, in cases of couples (both husband and wife) have siblings; the child will continue to be victim of 4-2-1 phenomenon. Given the contraceptive prevalence rate for women (UN data, 2006) of 15-49 cohort being as high as 84%, planning (and entailing responsibilities) of second child by couples seems dim at an aggregate basis.
Thus, the reform proposed in Third Plenum is not a full proof plan. President Xi Jinping has a perfect analogy with Deng Xiaoping in grappling with a compulsion of sorts. Deng was faced with a bulging population; Xi finds the challenge in ageing one. Moreover, an increased expenditure on old age security will put strains on the defence budget. This may be detrimental to the security dilemma in East Asia which China adamantly maintains. Nevertheless, Xi's timely realisation and initiation of reforms may work wonder in Chinese demographics and society in the years to come.
(The writer is a Research Assistant at Observer Research foundation, Kolkata Chapter)
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