Wry & Dry

China scraps one-child policy

Well, the line 'demography is destiny' again rears it head.  The Chinese government news-agency, Xinhua, last night announced that Chinese couples will now be allowed to have two children.

Pragmatic as ever, the government has noticed that China's workforce is declining.  The chart tells the story...

Chinas workforce

The one-child policy was introduced in 1979, with exceptions for rural families if the first born was female, and for ethnic minorities.  The problem was not only the now rapidly ageing population, but also female infanticide and a resulting and massive gender imbalance.  That gender imbalance has led to there being some 30 million more men of marriage age than women. 

This had led one economics professor (Xie Zuoshi of Zhejing University of Finance and Economics) to come up with a rationale market-based solution.  "As women are in short supply, their value increases", he says.  "So adjust the market". He proposed that women be allowed to take on multiple husbands.  W&D's mind is trying to imagine the nightly choice...  That is, who controls the remote?

Anyhow, all of that no longer matters.  The decision to allow families to have two children was designed "to improve the balanced development of population.''

But it's probably too late.  The change will not make a difference to the workforce for 20 years (obviously).  The Chinese Academy of Social Sciences says the fertility rate (number of live births per female) has dropped to 1.4 and is nearing the danger line of 1.3 where it becomes culturally self-perpetuating.  This has already occurred in Japan, Korea and Taiwan.  The point is that these countries are relatively rich.  China will reach the problem of not having enough workers to support the aged non-workers whilst the country is still poor.

The news came as the Australian Bureau of Statistics announced that Australia's fertility rate had dropped to its lowest level in a decade, to 1.8, from 1.88.  As a fertility rate of 2.3 is required for a population to naturally replenish itself, Australia must rely on immigration for increasing its population.