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Fewer Expecting Than Expected

New demographic data suggests China’s aging population crisis will come sooner and hit harder than predicted

By Yu Xiaodong Updated Mar.11

In past years a rapidly aging population has been considered a major threat to the sustainability of China’s economic growth, as well as a source of social problems. But recent data shows this problem may be even more serious than predictions that had previously been considered “alarmist.”  

According to data released by China’s National Bureau of Statistics on January 18, 17.23 million babies were born in 2017. That was only slightly lower than in 2016 (17.86m), and the figure may seem normal at first glance. But considering 2017 was the second year after China relaxed its family planning policy to allow couples to have two children, the figure is far below what was estimated – and hoped for.  

According to a 2015 report compiled by a team headed by Wang Pei’an, deputy director of the National Health and Family Planning Commission (NHFPC), the “two child” policy launched in late 2015 should have resulted in more than two million additional births each year beginning in 2017. The report put its estimate for 2017 between 20.23 and 21.95 million, at least three million more than the reality. Even further off the mark was the report’s estimate that without the policy to allow all couples to have two children, the number of births in 2017 would hit 17.7 million.  

It is not the first time the authorities have over-estimated the impact of the relaxation of a family planning policy. When China relaxed the so-called one-child policy in 2013 to allow couples to have two children, as long as one of them was an only child themselves, the authorities estimated that it would lead to two million more births each year. But after one year, the policy had created fewer than one million additional babies born as second children in the family, and less than a half-million increase in the overall number of babies.  

In 2015, the authorities responded by further relaxing the family planning policy to allow all couples to have two children. By increasing the number of couples who were qualified to have two children by a factor of nine, even conservative estimates projected that the policy would add two million births annually, if not four or eight million.  

But when the demographic data in 2016 showed that the policy only resulted in about 1.3 million additional babies born as the second children of their families, experts argued that people needed time to adjust to the new policy, and said the impact would be fully felt in 2017. The latest demographic figures, which contrast sharply with these estimates, suggests that China’s family planning policy has not kept pace with China’s demographic reality.  

Decline in Firstborns 
Besides the unexpected low number of second children, another pattern has caused concerns among demographers: the decline in the number of firstborn children, a more significant demographic challenge. 

Official data shows that among the 17.23 million babies born in 2017, 8.83 million were second children, or 51.2 percent of the total. In the meantime, the number of firstborn babies dropped from 9.73 million to 7.24 million, a drop of 26 percent. The relatively high number of firstborn babies in 2016, compared to 8.86 million in 2015, is partly due to a traditional belief that during the Year of the Sheep (2015) under the Chinese zodiac people should avoid giving birth, but there remains a clear trend that number of firstborn babies is dropping.  

According to Li Xihe, a senior official from the NHFPC, a major reason behind the decline lies in the decline in the number of women of childbearing age. Li told media that compared to 2016, the number of women aged between 15-49 dropped by four million, and the number of women aged between 20 to 29 dropped by six million in a single year.

Currently, China’s population is still growing, with a natural growth rate of 0.586 percent in 2017. But given the current demographic structure, the declining number of women of childbearing age will be a long-term trend. Based on the data released by the National Bureau of Statistics, the number of women aged between 20-34 will drop from 160 million in 2016 by 30 percent to 112 million in 2026, meaning the number of births could fall off a cliff in the next decade.  

Demographers believe that if there is no major policy change, after China reaches its population peak some time between 2025 and 2030, it will see a rapid decline in total population, along with an increasing aging population, which would pose serious economic and social problems. For example, the ratio of people of working age to the total population has been continuously declining since 2012, leading to the evaporation of the “demographic dividend” that has allowed China to become the world’s manufacturing center.  

Low ‘Fertility Desire’ 
Underlining the unexpectedly low number of births is a declining “fertility desire” among China’s young couples – for reasons that are both cultural and economic.  

Culturally, after several decades of China’s strict family planning rules, a traditional fertility culture that favors more children has been undermined by one that favors just one child, or no children at all. Among women currently of childbearing age, many were born in the 1980s and are themselves an only child. As in developed countries, the increase in living standards and rapid urbanization has also led to a change in fertility culture that discourages couples from having multiple children.  

Economically, China’s runaway housing prices and the lack of affordable childcare have all contributed to the decline in Chinese couples’ fertility desire. According to a 2015 survey on the subject conducted by the NHFPC, high financial costs, a lack of energy and lack of childcare support are listed as the top three reasons by Chinese parents as to why they don’t want to have a second child. The same reasons could be equally applicable for would-be parents when deciding whether to have a child at all.  

Under a decades-long family planning policy that punished people who had multiple children, providing affordable childcare has been among the government’s lowest policy priorities.  

According to a 2013 report on child development, there are only about 65,000 public childcare centers throughout the Chinese mainland–while there are around 80 million children under the age of four.  

Although the Chinese government has encouraged private capital to engage in childcare services, it offers no subsidies to parents, and the cost of sending one child to a private childcare center can easily amount to half of an average family’s income. In 2017, a high-profile child-abuse scandal involving a popular private childcare franchise further spread anxiety among parents and would-be parents. The result is that it is estimated only four percent of Chinese children under three have access to affordable childcare services, with the vast majority of children being cared for by grandparents.  

Not only do Chinese parents receive no childcare benefits, they also do not get tax relief on childcare-related expenses. Although there have long been calls to make some child-related expenses tax deductible and to reform the personal income tax regime to take the size of a family into consideration, this has amounted to no major changes in Chinese tax codes. 

In the past few years, the government has mostly relied on liberalizing the family planning policy to boost the fertility rate. But new demographic figures show that reforming family planning alone will not address China’s demographic problems. The consensus is now that it is long past due for the government to overhaul its approach to the country’s family planning policy by offering incentives to promote fertility desire.