Why China’s New 3 Child Policy Wouldn’t Help in its Quest to be a World Power

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China’s moves to arrest its demographic decline might be too little, too late and its quest to become a World Player risks falling into the stagnation trap that Japan faced in the 1980s

China announced yesterday that it would now permit couples to have three children, up from the two that it specified in 2015, and a marked departure from its longstanding One Child Policy. While the One Child Policy was an attempt to slow down the burgeoning population in the 1950s after the Revolution, and was widely seen as draconian and severe, it was successful in preventing a Demographic Explosion that would have spelled much trouble for a country that was already the most populous in the world.

However, while the One Child Policy was successful for what it was intended in the first place, it had the consequence of making China a country with Declining Birthrate to the extent that experts now believe that its Fertility Rate would peak in 2025, much earlier than expected. What more, its Replacement Rate (the measure of how a country is doing as far as the Birth — Death equation is concerned) has also gone down to the extent that China faces the threat of Demographic Decline in the next decade or so.

Worse, with an Ageing population (statistics show that over 25% of the total population would be 60 or older by 2030), it faces a Double Whammy of Shrinking Youth and Growing numbers of the Aged, leading to Labor Market distortions, since in a few years time, there would be more retirees than working age youth. This has implications for its Workforce Participation rates and a clear risk of lack of enough people to work, a clearly uncomfortable scenario for a country that prides itself as being the Next Great World Power.

Indeed, these risks are why China’s quest for World Domination might be stymied from within rather than from external actors, a stark position which its sanitized History Books often depict the other way around, namely once a Great Power brought to its Knees by Nineteenth Century Western Imperialists. This Xenophobic attitude is again a source of weakness as it cannot “grow” by immigration, something which the United States, followed and follows (despite setbacks during the Trump presidency) wherein shrinking populations are offset by encouraging immigrants.

Moreover, this is the same situation that led to the so-called “lost decades” for Japan in the 1980s and 90s wherein for a country that was on the “cusp” of superpower status, it lapsed into being a regional power, at best. In addition, China can also learn a thing or two from the Japanese about Stagnation and Degeneration due to Demographic Declines.

While these risks are clearly anticipated by the Chinese (who think in decades and centuries unlike others focused on the immediate future), their main concern was arresting the population explosion and bringing in more workers into White Collar jobs by investing heavily in education and healthcare, and in the process, empowering women to work and practice the One Child Policy. Its move in 2015 to permit them to have Two Children is still being gauged for its successes or otherwise, and yesterday’s announcement is similarly likely to be debated for weeks and months to come.

However, with more women educated and in professional jobs, there are social and cultural factors at work since historically, societies with more educated and working women have seen Fertility Rates drop and that too dramatically. Indeed, the Scandinavian Countries and the Asian Tiger Economies are clear examples of this factor in play. In India, the state of Kerala is a notable example of how nations can make birth rates plummet by investing in women and in healthcare and education.

Therefore, China’s belated attempts at Damage Control might be too little, and too late, though given their ingenuity at “copying the west”, they might come up with more creative solutions to the “unintended problems” of its successful, yet consequential population control strategy.

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