Brookings: Experts - Feng Wang

Population, Policy, and Politics: How Will History Judge China’s One-Child Policy?

Feng Wang, Yong Cai and Baochang Gu — Mon, 25 Feb 2013 00:00:00 -0500

One of the main puzzles of modern population and social history is why, among all countries confronting rapid population growth in the second half of the twentieth century, China chose to adopt an extreme measure of birth control known as the one-child policy. A related question is why such a policy, acknowledged to have many undesirable consequences, has been retained for so long, even beyond the period of time anticipated by its creators.

With the world’s population growth rate now at half its historical peak level and with nearly half of the world’s population living in countries with fertility below replacement level, we can look back at the role politics played in formulating, implementing, and reformulating policies aimed at slowing population growth (Demeny and McNicoll 2006; Robinson and Ross 2007; Demeny 2011). In this context, an examination of China’s unprecedented government intervention in reproduction offers valuable lessons in appreciating the role of politics in the global effort of birth control in the twentieth century.

Aside from the rise and fall of Communism, family planning programs along with the Green Revolution could be considered two of the most consequential social experiments of the twentieth century. These two experiments differ, however, in both content and approach. The Green Revolution was aimed at feeding the population, while family planning programs were designed to curtail its growth. The Green Revolution was technological, economic, and global, while family planning programs were social, political, and often country specific.

Nowhere in the world did politics and policies figure more prominently in the effort to control population growth than in China. The policy of allowing all couples to have only one child finds no equal in the world and it may be one of the most draconian examples of government social engineering ever seen. In this essay, we cast China’s one-child policy in the changing global context of population policymaking, we revisit the supposed necessity of such a policy by examining the claim that the policy was responsible for preventing 400 million births, and we discuss the reasons such a policy, with all its known negative consequences, has been allowed to stay in place for more than thirty years since its inception.

Editor's Note: this paper first appeared in Population and Development Review, published by the Population Council.

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Authors

Feng Wang
Yong Cai
Baochang Gu

Publication: Population and Development Review 38 (Supplement): 115–129 (2012)

Escaping the Middle Income Trap

Thu, 01 Nov 2012 02:00:00 -0400

Event Information

November 1, 2012
2:00 AM - 5:30 AM EDT

School of Public Policy and Management Auditorium
Brookings-Tsinghua Center

Beijing, China

Time: 2:00 pm - 5:30 pm Beijing Time (China Standard Time)
Location: Auditorium Hall, School of Public Policy and Management, Tsinghua University, Beijing, China

China is at a turning point in its economic development. With its double-digit economic growth rate coming to an end, China now faces new challenges that could threaten its progress to catching up with living standards in the United States, Japan and Western Europe. China faces the danger of not being able to move beyond the so-called "middle-income trap," a phenomenon that describes a country when its growth plateaus and eventually stagnates after reaching middle income levels. It has long plagued Latin America, and Malaysia has had an extended struggle with it in the past decade.

On November 1, the Brookings-Tsinghua Center for Public Policy (BTC) hosted a public forum featuring experts who have recently completed a landmark study on how China could escape the same trap in which many other developing countries have languished. The presentations and discussions were based on the recently published book, A New Economic Growth Engine for China: Escaping the Middle-Income Trap by Not Doing More of the Same, co-edited by Brookings Nonresident Senior Fellow Wing Thye Woo.

The event was held in both English and Chinese with interpretations. The speakers took audience questions after each panel discussion.

Feng Wang

Wing Thye Woo

Event Materials

The Foreign Policy Debate: Key Issues and Omissions

Tue, 23 Oct 2012 10:30:00 -0400

On October 22, President Barack Obama and Governor Mitt Romney met in the last presidential debate of 2012, this time focusing on foreign policy. Read the reactions to the debate by Brookings Foreign Policy experts: Justin Vaïsse looks at Romney’s caution regarding military interventions and what the debate reveals about the foreign policy mood of American public opinion; Feng Wang analyzes current U.S.-China relations and the candidates’ statements on trade and political dialogue with China; Steven Pifer examines the U.S.-Russia relationship and how each candidate plans to approach Russia if elected; Tanvi Madan comments on the omission of India from the debate, and the importance of addressing the U.S.-India relationship in the future. Diana Negroponte evaluates Romney’s statements on Iran and Afghanistan.

It's Official: Come Home, America
Justin Vaïsse, Director of Research, Center on the United States and Europe and Senior Fellow, Foreign Policy
Foreign Policy

The striking thing about Republican nominee Mitt Romney's position in this third presidential debate was how much he retreated from the military assertiveness he seemed to have embraced so far. Of course, he reaffirmed his support for a strong military and for increasing the defense budget. But consider this:

Romney did not call for a no-fly zone in Syria, as many hawks like Max Boot have suggested. He did not call for Congress to pre-authorize military action in Iran, as some of his neoconservative advisers like Elliott Abrams have advocated. He didn't criticize Obama for relying excessively on drone strikes instead of human operations, a choice that hampers the collection of intelligence by obliterating sources of information, as many critics of the president like Charles Krauthammer have rightly charged. He didn't qualify his endorsement of the 2014 deadline in Afghanistan by saying that he would consider the situation on the ground and ask the generals, like he had before.

Instead, Romney insisted that America's purpose "is to make sure the world is peaceful. We want a peaceful planet... I want to see peace... We don't want another Iraq. We don't want another Afghanistan." As for military action, it is "the last resort. It is something one would only, only consider if all of the other avenues had been tried to their full extent."

Read the full article at foreignpolicy.com »

Beyond Trade with China
Feng Wang, Director, Brookings-Tsinghua Center and Senior Fellow, John L. Thornton China Center

In their last presidential election debate on October 22^nd, both President Obama and Governor Romney acknowledged that China as a partner, and put economics on the top of their agenda for their China policy. For relations between the world’s largest and the second largest economies, such a stand from both candidates is assuring.

When asked about his plan to designate China the status of currency manipulator on day one of his administration, Governor Romney stood by his promise and also explained why he believed that China might not want to enter into a trade war with the United States: the trade disparity between the U.S. and China. China exports much more to the U.S. than vice versa, and China therefore needs the U.S. market more than the U.S. does.

Whether China chooses to have a trade war with the U.S. may depend more than the economic calculations Governor Romney laid out, as economic decisions are rarely made on economic considerations alone. A designation of the currency manipulator status, after the Chinese RMB has appreciated substantially over the last few years, will not only set the new tone of the U.S.-China relations, should Governor Romney enter the White House in January 2013, it could well have ramifications that can cloud the U.S.-China relations for an extended time period, a year or more, which will not help a recovering U.S. economy.

As with the U.S., China is under a leadership transition. A new Chinese leadership will be fully in place by March 2013, with the transition beginning in public two days after the U.S. presidential election, on November 8^th in Beijing, when the Chinese Communist Party begins its 18^th National Congress. The emerging Chinese leadership would not want to appear "soft" when faced with a gesture from a new U.S. administration that is seen as not fully justified and overtly hostile. Domestic politics here in China, hence, will almost certainly affect any decisions that the new Chinese leadership will make. If there is any doubt about such a prospect, the recent chilling of Sino-Japanese economic relations resulting from the island territory dispute is a fresh reminder.

Governor Romney and Russia as America’s Geopolitical Foe
Steven Pifer, Director, Arms Control Initiative and Senior Fellow, Center on the United States and Europe

In last night’s debate with President Obama, Governor Romney again reiterated that Russia is America’s major geopolitical foe. To be sure, the U.S.-Russia relationship faces tough issues; Vladimir Putin will not be easy to deal with and has taken Russia backwards on democracy. But the bilateral relationship is more complex than the governor suggests. U.S. and Russian interests converge on certain issues, and cooperation on those questions makes eminent good sense.

One explanation for the governor’s view may be a political calculation that taking a strong stance against Russia plays well with a segment of the American electorate. Both countries seem to suffer something of a lingering Cold War hangover. Indeed, during his presidential campaign late last year and early this year, Mr. Putin played the anti-U.S. card in a thinly veiled appeal to the conservative part of his Russian constituency.

But the fact remains: whoever sits in the Oval Office in 2013, he will seek Moscow’s help on key questions. Take Afghanistan. Russia the past three years has permitted the United States and NATO to move manpower and supplies—including lethal military equipment—through Russia and Russian airspace to Afghanistan. Washington will want to ensure that it continues to have that access, or is Mr. Romney prepared to depend solely on the Pakistanis, who cut the supply routes to Afghanistan last year following the killing of Osama bin Laden?

Moscow has not come as far as Washington would like in pressuring Tehran, but it has come further than anyone would have predicted a few years ago. The Russians in the UN Security Council supported stronger sanctions on Iran’s nuclear program, including an embargo on all arms sales. That came at a price for them; they ended up cancelling a previously concluded sale of sophisticated S-300 anti-aircraft missiles to Tehran. Planners in the U.S. and Israeli air forces, which could be called upon to carry out strikes against Iran, undoubtedly appreciate that they would not have to contend with the S-300. Would Mr. Romney be prepared to see that Russia cooperation unravel?

The Obama administration’s "reset" in Russia policy was based on a calculation that showing a readiness to take account of some Russian concerns, for example, with regards to nuclear arms control, could produce Russian support on questions such as Afghanistan and Iran. Maintaining Russian help on these questions, which will be at the top of the White House in box next year, will be important.

Managing the complex U.S.-Russia agenda has never been easy. The governor has criticized the reset and called for showing more backbone and less flexibility in dealing with Moscow. That might make for good campaign rhetoric, but as with most international relationships, Washington must take account of at least some of the other country’s interests if it seeks that country’s support. The challenge is to find a balance between cooperation where interests converge while defending U.S. positions where positions differ. Simply reiterating time and again that Russia is America’s geopolitical foe does not appear to recognize that complexity.

Just Breathe: Why Sometimes Not Being Mentioned in a Debate is a Good Thing
Tanvi Madan, Director and Fellow, The India Project

Following the foreign policy debate between President Obama and Governor Romney last night, there was much comment about the omission of a number of countries and issues. Among the Indian Twitterati – as well as others in the Twitterverse – there was some consternation about the fact that neither candidate mentioned India. Laments followed about what this said about the state of the U.S.-India relationship and about the importance of India. Viewed through a different prism, however, India should probably be glad that it was left out of the discussion last night.

Consider the countries that did get mentioned the most (leaving aside Mali): Afghanistan, China, Iran, Israel, Pakistan and Syria. They are either countries (a) on which the two candidates disagree, (b) considered to be in crisis or a threat to U.S. national security, and/or (c) seen as important to mention because they are perceived by the candidates as resonating in crucial swing states like Ohio (China) and Florida (Israel).

Seen in this context, Indians and advocates of India might want to breathe a sigh of relief that it was not mentioned. For one, there aren't major disagreements between the candidates on India: if anything when India has come up in this campaign cycle, it has been mostly in the context of who has done more (or less) to maintain and further support the U.S.-India relationship. Second, it is a good sign for India that it is not seen as being in crisis. To remember what that was like, think about the time when it was most often brought up in discussion as being part of the "most dangerous place in the world." India is also not seen as a threat. China was the large Asian country that was portrayed as threatening—either to U.S. jobs at home or to American economic and security interests around the world. Advocates of India and U.S.-India relations should probably be glad that, unlike the rise of China, India’s rise was not mentioned by the moderator just before he asked, "What do you believe is the greatest future threat to the national security of this country?" Finally, in previous campaigns when India has come up as a political issue, it has been in the negative (think outsourcing and the Obama campaign labeling then-Senator Clinton as the Democratic senator from Punjab in the 2008 primaries). Indian-Americans, while more and more politically active and seen by both parties as increasingly important to court, have not reached the stage where they are seen to mean the difference between a swing state being in the D column or the R column. So, positive shout-outs to India in the political context weren’t likely to be high on the priority list of either candidate. Advocates of U.S.-India relations should be thankful that India at least did not come up in the negative, with China instead taking the heat on outsourcing.

Overall, there were some other omissions that were more surprising – the Eurozone crisis and the pivot/rebalancing towards Asia among others. In a debate where a country like China was only mentioned 10-15 minutes before the debate was scheduled to end, the lack of mention of India was hardly a surprise. One can debate the overall quality and range of the foreign policy discussion yesterday, but the omission of India from the discussion should not spark another round of doubt and hand-wringing about the U.S.-India relationship. There’s a broader case to be made that India needs to think about what it needs to do to maintain its importance to the U.S. and that it can’t take this importance for granted. Even if it had been a critical or long-term ally, however, this would not have guaranteed a mention. After all, think about how much—or rather how little—countries like Australia, Britain, Japan and South Korea came up.

New Realism Emerges in the Third Presidential Debate
Diana Villiers Negroponte, Nonresident Senior Fellow, Latin America Initiative

Much of what the candidates debated last night was “old hat.” We knew ahead of time of foreign policy positions long held, as well as those which had evolved. But there were two pieces of news:

First, Governor Romney supported bilateral talks with the Iranians. Our mission in Iran “is to dissuade Iran from having a nuclear weapon through peaceful and diplomatic means.” He welcomed “potentially having bilateral discussions with the Iranians to end their nuclear program.” The exchange indicated that such a dialogue maybe underway, although President Obama denied newspaper reports of such talks. Romney reiterated his call for tighter sanctions, diplomatic isolation and called for the international community to indict Ahmadinejad for his genocidal rhetoric against Israel. What he did not discuss was his support for, or objection to, the International Criminal Court in which such an indictment might be presented. Romney’s support for bilateral negotiations indicates awareness of the need to counter Iran through a wider range of options.

Second, Governor Romney stated that he would leave no U.S. troops in Afghanistan after 2014. “I will bring our troops out by the end of 2014…our troops will come home at that point.” No longer would Romney wait to hear from senior military advisors. Now, he supports President Obama’s decision to withdraw combat troops in 2014. What remains uncertain is whether a residual force of trainers and logisticians would remain under a Status of Forces agreement that is still to be negotiated.

Both news items indicate that the realism which should accompany a potential Commander in Chief has settled upon Romney’s shoulders. Both candidates are conscious of the global role that the U.S. assumes. Neither candidate shared U.S. national security interests with multilateral institutions, or allies. Neither was isolationist. Instead, we saw two robust men project U.S. power in a way that may disturb our friends because it indicated that the U.S. is ready to act unilaterally when necessary.

Authors

Image Source: © Kevin Lamarque / Reuters

China’s Prospects on the Eve of the 18th Party Congress

Thu, 20 Sep 2012 14:00:00 -0400

Event Information

September 20, 2012
2:00 PM - 5:15 PM EDT

Falk Auditorium
Brookings Institution
1775 Massachusetts Avenue NW
Washington, DC 20036

This fall, most of the top leaders of the Chinese Communist Party will be replaced during the 18th Party Congress. The leadership realignments will affect the most important leadership bodies of the country – the ruling Politburo and its Standing Committee, the State Council and the Party’s Central Military Commission. What social, economic and foreign policy challenges await the new generation of Chinese leaders, and how might the new leadership respond?

On September 20, the John L. Thornton China Center at Brookings hosted a discussion analyzing the major issues that will confront China’s new leadership, including tensions in U.S.-China relations, the China-Japan South China Sea dispute, and the country’s future economic and military development.

Video

Transcript

Uncorrected Transcript (.pdf)

Event Materials

20120920_china_congress

China’s Demographic Trend Reshapes Its Economic Future

Feng Wang — Fri, 01 Jun 2012 00:00:00 -0400

Editor’s Note: The following article originally appeared in China Economic Quarterly, a publication by Dragonomics Research and Advisory.

China’s demographic bullet train is racing into the unknown. Its carriages are already full, but more passengers squeeze in every minute. Most are not young, productive workers, but older travelers who cannot pay for their ride. No one knows where the train will stop, nor whether it will arrive safely.

Profound demographic changes in China are redrawing the parameters of the country’s future. These changes include a substantial decline in the supply of young labor, the escalating financial burden of caring for the elderly, and an aging society with Chinese characteristics—namely a severely weakened family support system, caused in large part by China’s three-decade one-child policy. These changes have already begun to exert a powerful impact on the Chinese economy, and pose a serious risk to future economic growth, social harmony and political stability.

Old before its time

In most countries, demographic changes are easily anticipated. Fertility and mortality, two major factors driving changes in population size and age structure, do not change abruptly (except when altered by pandemic, war or famine). But this is not true for China, where the 2010 census showed that population growth has slowed far more quickly than most observers expected. From 2001-10, China’s population inched up at just 0.57% annually—only about half the level of the previous decade, and only one-fifth of the level in 1970, when controlling population growth first became a priority. The census also showed that there are fewer young people and more old people than forecast. By 2010, nearly 14% of Chinese citizens were over 60, and nearly one in 10 were over 65. China is already an aging society.

The driving force of China’s slowing population growth rate is its low fertility rate, which has languished well below the replacement level of 2.1 for two decades. The census confirms that China’s total fertility rate—the average number of children born to each woman—is among the lowest in the world, at only 1.4. This number puts China below the developed-world average of 1.7. At purchasing power parity, China’s per-capita income is just a fifth or less of other large economies’. But China’s fertility level is far below that of the United States, the United Kingdom or France (all around 2.0), and is on par with those of Russia, Japan, Germany and Italy—all countries with declining populations.

For more than a decade, China has repeatedly failed to reach population targets supposedly put in place to control growth—undershooting by a huge margin. For the 10th Five-Year Plan, the National Population and Family Planning Commission (NPFPC) set a population growth target of 62.6m, but China recorded an actual population gain of just 40.1m. For the 11th Five Year Plan, the population gain of 34.2m was far below the 52.4m target. In both cases, the margin of error was greater than 50%! The 12th Five Year Plan (2011-15) projects an annual growth rate of 0.72% and sets a population target of 1.39 bn, way above the forecasts of independent demographers. Unrealistic targets are easily met, and can therefore serve a political function. But inflated numbers also reflect real thinking among some of those in charge of birth control. NPFPC’s skewed data have misled the public as well as top policy makers.

Lost youth

As society ages faster than expected, China’s future demographics need to be reassessed. Sustained low fertility means that the number of young workers will decline more sharply than projected. In 2010, there were 116m people aged 20 to 24; by 2020, the number will fall by 20% to 94m. But the actual number of workers will be considerably lower than 94m, thanks to rising participation in higher education. Annual higher-education enrollments tripled from 2.2m to 6.6m in 2001-10, while the number of college students (mostly aged 18 to 21) rose from 5.6m to 22.3m. Declining fertility levels reduced the availability of young workers, but this was exacerbated by the expansion of higher education. Sustained low fertility and rising college enrollments mean that the supply of young workers will continue to decline beyond 2020. The size of the young population aged 20-24 will only be 67m by 2030, less than 60% of the figure in 2010.

As the share of young people falls and the share of elderly people rises, Chinese society will age rapidly. China already has 180m people aged over 60, and this is set to reach around 240m by 2020 and 360m by 2030. These are minimum numbers, which will only increase with rising life expectancy. Less certain are how fertility rates will affect the population age structure. Should China’s currently low fertility of 1.4 children per couple be sustained, the population share of people aged over 60 could reach 20% by 2020 and 27% by 2030. Using the more conservative international definition of elderly—people aged 65 plus—one in five Chinese citizens will be elderly by 2030.

China’s aging process is happening far more quickly than in most other countries, largely thanks to the speed of its demographic transition from high death and birth rates to low death and birth rates. It took China only 50 years to increase life expectancy from 40 to 70 years, compared to 100 years in Western industrialized countries. China reduced its fertility level from five to two children per couple in just 25 years, just one-third of the time taken in the West. The impact on China’s future age structure is clear: it will take less than 30 years for the share of the population aged over 65 to rise from the current 9% to 25%. In other aging countries like Italy, Germany, and Russia, it will take the best part of a century.

This compression of demographic change into such a short period of time means that China will be the first major economy to grow old before it grows rich. At China’s current level of population aging, with 9% of the total population over the age of 65, other societies had already achieved a much higher level of standard of living. Measured by per-capita purchasing power parity, income levels in Japan were twice as high, and those in South Korea nearly three times higher. Moreover, China’s social infrastructure—especially its pension and health care system—is much weaker than those in most other aging societies. And no other countries must cope with such a large share of families supported by single children.

Slower, lower, weaker

China’s rapidly aging population will have enormous economic and social implications. The demographic dividend China enjoyed over the past 30 years—especially in 1980-2000—is now largely exhausted. In 1980-2010, the effect of a favorable population age structure accounted for between 15% and 25% of per-capita GDP growth. As China’s demographic fortunes reverse, the economy will slow down regardless of other factors driving growth. Since China’s economic and political governance model is premised on near double-digit growth, this will require substantial policy change.

For decades, China’s economy has been driven by high inputs of cheap capital and labor. This cannot continue. First, private savings—the most important source of capital for investment—will decline as a share of GDP over the coming decades. Currently, China has many more net savers than net consumers. But the population share of people aged 30 to 50—typically the highest savers—will drop from 50% in 2010 to around 46% in 2020, and fall to 40% by 2030. As the current cohort of high savers move towards retirement, the national rate of savings growth should decline and spending accelerate. This is the experience both in Japan, where the savings rate declined from 34% in 1990 to 28% in 2007, and in South Korea, where the savings rate dropped from 39% in 1988 to 31% in 2008.

Second, cheap labor will no longer be as plentiful as it was over the past 20 years. As the supply of young workers shrinks—a process that has already begun—increased labor mobility will be essential to create a more efficient labor market. Mitigating the negative impact of this will require reforming China’s hukou system, which links social security and public welfare entitlements to citizens’ place of registration. China’s “floating population” of rural migrants now stands in excess of 220m, but the hukou system remains a significant barrier to migration. If rural migrants were given access to urban education, health care and other welfare services, more rural residents would move to the cities on a permanent basis.

The shrinking labor force will also require education reforms to boost productivity. Indigenous innovation is not just an empty slogan; it is a necessity to ensure that the Chinese economy gets more bang for its buck. The “Made in China” model will not provide sufficient economic returns to support an aging society. China’s labor force must become better educated, more skilled, and produce graduates with a greater ability to innovate. The current higher education system, which focuses on training technicians rather than nurturing individual thinkers, suffocates creativity. It is better at producing bureaucrats than managers. Greater investment must also be directed at the nursery and primary level, especially in poor areas where basic nutrition and educational facilities are still lacking.

The benefits of age

China’s demographic transition will create opportunities as well as challenges. Population aging and the growing pile of pension funds are already forcing changes in the capital market and financial services sector. For example, Guangdong recently entrusted Rmb100 bn of its largely unmanaged provincial pension funds to the National Council for Social Security Fund, which may invest some of the capital in the stock market. Without well-functioning capital markets, savings cannot be put to productive use and may even lose their value. An aging society will require a more sophisticated investment sector, thereby presenting new opportunities for financial managers and investment services.

Another big growth area will be health care. Establishing better long-term insurance plans will be critical in a country with few young family members to care and provide for the old. Currently over 40% of all middle-aged Chinese couples have only one child, a figure that rises to two-thirds in cities. A sound social safety net needs to be put in place before the economy feels the full force of deteriorating demographics. That means extending and improving the fledgling national pension scheme, and creating a universal medical insurance program that is portable across regions.

Reforming the health care system is a daunting challenge. Over the past decade China made important strides to extend health care coverage across the population—yet serious challenges remain. For individuals, the two big issues are lack of access to decent treatment and paying for its often exorbitant cost. For the government, the major challenge is creating a fiscally sustainable public health care system. Funding remains a significant issue, but the system also suffers from the inefficiencies of bureaucratic control and price distortions, which set the cost of labor artificially low. As a consequence, hospitals routinely attempt to profit by over-prescribing medicine. Since elderly people account for the largest share of health care costs, getting these reforms right has important economic implications.

Preventing a train crash

Fiscal imperatives brought about by demographic changes are also set to change the political landscape. Over the next 20 years, the ratio of workers to retirees (presuming workers continue to retire at 60) will drop precipitously from roughly 5:1 today to just 2:1. Such a drastic change implies that the tax burden for each working-age person must rise by more than 150%, assuming that the government maintains its current level of tax income. During the past decade, tax receipts grew at twice the rate of GDP—but the happy days are set to end. In addition, mounting expenditure on social entitlements—especially pensions and health care—will put leaders in a difficult position. If the government demands that taxpayers pay more, the public will demand better scrutiny of how their dollars are collected and spent. The government will have no choice but to cut corruption and waste, and to deliver public services more efficiently. The alternative is a crisis of governance.

In many respects, China’s demographic transition is a reason for celebration: it reflects an unprecedented decline in mortality and enormous economic development. It has allowed women to slough off their traditional status as breeding machines and helped millions of students to gain a proper education. But the rapid decline in fertility rates has gone too far, and China will have to make major structural reforms to offset the impact. After years of demographically powered high-speed growth, the Chinese bullet train is racing towards a demographic precipice. The challenge for policy makers is to prevent it from careering over the edge.

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Authors

Feng Wang

Publication: China Economic Quarterly

Image Source: David Gray / Reuters

The Chinese Welfare State in Transition: 1988-2007

Wed, 30 May 2012 00:00:00 -0400

Event Information

May 30, 2012
12:00 AM - 12:00 AM EDT

Room 302
School of Public Policy and Management, Tsinghua University

Haidian Beijing 100084

Time: May 30, Wednesday, 2012, 10:00 – 11:30
Venue: Room 302, School of Public Policy and Management, Tsinghua University
Language: Chinese

On May 30, 2012, Dr. GAO Qin, associate professor at Fordham University in New York City was invited by Brookings-Tsinghua Center for Public Policy to deliver a speech about Chinese welfare state at the School of Public Policy and Management of Tsinghua University. Her speech was titled “The Chinese Welfare State in Transition: 1988-2007." Dr. Wang Feng, the director of Brookings-Tsinghua Center, moderated this event.

Dr. GAO Qin first put forward a very important concept—the welfare state, and gave her own definition. She coined it as “public provision of cash and in-kind benefits to protect and improve the well-being of its citizens.” The core values of the welfare state are equal opportunity and public responsibility for private vulnerability. It also comprises of three key components—social relief, social insurance and social investment.

After conceptualizing the welfare state, Dr. GAO Qin proposed two questions, asking everyone that whether China is a welfare state and if so, what it looks like. She then resolves these questions in following four aspects—size and structure, impact on income equality, progressivity and cross-national comparison. She considered that, conceptually, China is arguably a welfare state according to its ideology, regime and market economy. However, based on CHIP data, China is a divided welfare state. She finds that the Chinese welfare state is much divided along the urban-rural line: the urban social benefit system, or the urban welfare state, stands among the more comprehensive and generous ones similar to those in the western industrialized countries, while the rural system is minimal and residual and similar to those in the least developed countries. The urban system has consistently reduced income inequality—despite to a lesser extent in recent years—and has remained progressive over time. The rural system had little impact on reducing income inequality and has been largely regressive. It is, however, moving toward a more progressive direction as indicated by the 2007 results. The social benefits for the migrants had significant increases from 2002 to 2007 and played an increasingly larger redistributive role. They are also moving toward a more progressive direction.

Finally, she concluded that China is a divided welfare state. To deal with this situation, she thought that China should pay much more attention to rural residents and migrants; learn more about the urban poor and the effectiveness of current policies; and balance economic growth, social development and human security.

After the keynote speech, Dr. Wang Tianfu, a nonresident fellow at Brookings and professor of the School of Humanities and Social Science of Tsinghua University, and Dr. Li Shi, professor of School of Economics and Business Administration of Beijing Normal University, made comments.

At the end, speakers took questions from audience.

Participants

Moderator

Feng Wang

Director, Brookings-Tsinghua Center
Senior Fellow, Foreign Policy, Global Economy and Development, John L. Thornton China Center

Panelists

Gao Qin

Associate Professor, Graduate School of Social Service

Li Shi

Professor, School of Economics and Business Administration
Director, Research Center of Income Distribution & Poverty

Challenges and Opportunities for a Growing China

Mon, 26 Mar 2012 14:00:00 -0400

Event Information

March 26, 2012
2:00 PM - 5:00 PM EDT

School of Public Policy and Management Auditorium
Brookings-Tsinghua Center

Beijing, China

On March 26 the Brookings-Tsinghua Center, a joint venture of Tsinghua University and the Brookings Institution, hosted a public forum exploring the challenges and opportunities that China will face in the next five years.

In the first panel, speakers discussed the opportunities and challenges that China faces in its continued economic growth and social transformations. In the second panel, speakers explored the impact of China’s rapid growth on regional and global dynamics and outline challenges and opportunities for China’s foreign policy.

Participants

Panelists

Zuo Xuejin

Senior Research Fellow and Executive Vice President
Shanghai Academy of Social Sciences

Cui Liru

President
China Institutes of Contemporary International Relations

Yu Keping

Deputy Director
Central Compilation and Translation Bureau

China's Population Policy Should Put People First

Feng Wang — Fri, 16 Dec 2011 00:00:00 -0500

In 2011, world population reached historic high, exceeding 7 billion accordng to the United Nations, with at least 1.3 billion of which concentrated in China. However as birth rate continues to hit record low across the globe, China is facing daunting social challenges as its rapidly aging population threatens to impede its economic growth. In an opinion piece published by Caijing magazine, Wang Feng examines world population trends and this unique development in China, advocating for fundamental change in the country's one-child policy before its demographic downward spiral reaches the point of no return.

Read the full article in Chinese at economy.caijing.com.cn »

Authors

Feng Wang

Publication: Caijing Magazine

Image Source: © Carlos Barria / Reuters

Economic Growth and Income Inequality in East Asia

Feng Wang — Tue, 19 Jul 2011 13:18:00 -0400

Editor's Note: The article first appeared in AsiaPacific Issues, No. 101, July 2011, published by the East-West Center.

Executive Summary:

During the closing decades of the twentieth century, much of the world witnessed a substantial increase in economic and social inequalities. Following a period of "growth with equality" that featured economic growth and social redistribution in East Asian countries shortly after World War II, a new era of "growth with inequality" has been ushered in. This leads to a divided society, threatens democratic institutions and suffocates economic growth. Looking forward to the next half century, will East Asia, a major area of economic growth of the 21st century, become increasingly unequal economically and socially?

The experience of China, a country that has seen a period of both spectacular economic growth and rapid income inequality increase, suggests that the state can serve both as an inequality creator and an equality enforcer. As equitable distribution of benefits of economic growth requires forces beyond the market alone, national policies are required to address the causes of rising inequality and create opportunities that will have beneficial long-term effects.

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Feng Wang

Publication: AsiaPacific Issues (No. 101)

Image Source: © Claro Cortes / Reuters

Wakeup Call in Beijing, from Census Takers

Feng Wang — Wed, 04 May 2011 15:44:00 -0400

Demographic shifts in China will challenge its economic growth, social stability and political rule, and set new imperatives for its model of economic growth and social governance in the coming decades.

On April 28, 2011, China’s State Council held a new conference to release the first round of results of its latest population census, conducted in November 2010. This latest census revealed a number of highly important facts, including several that were quite unexpected.

Among the most notable, China’s slowdown in population growth was fully confirmed. The low growth rate continues a long-term trend. During 2000-2010, China’s population grew at the rate of 0.57 percent annually. This is only about half of the level the prior decade and only one-fifth of the level in 1970, when China began to turn its attention to controlling population growth.

A New Chapter

Three decades ago, in 1980, China launched the most ambitious birth control program in human history, requiring each couple to have only one child. Thirty years later, that policy has become too successful. The census confirms that China’s fertility level (the number of children a couple is expected to have in their lifetime) now is among the lowest in the world, with a total fertility rate of only 1.4. This number puts China below the average of the more developed world (1.7). Though still a country with a per capita income level about one fifth to one-sixth of the world’s other largest economies, China has a fertility level that is now far below that in the United States, the United Kingdom, and France (all around 2.0) and is on par with Italy, Germany, Japan, Russia, and Spain.

At the same time as the fertility is dropping, China’s population is continuing to migrate around the country. The census counted 221 million Chinese as migrants, defined as being away from their place of household registration for six months or more, and not counting those who are away but still living in the same city district. The size of the migrant population shot up by 83 percent from 2000, compared with the overall population growth during the same period of less than 6 percent. This continued migration flow at an unprecedented scale has served as a fundamental driver for China’s recent economic boom.

Economic growth and migration combined also pushed China across another historical benchmark. The census reported 49.68 percent of China’s population as urban at the time of the census, which means by now half of all Chinese are urban. The first decade of the twenty-first century, therefore, was also China’s fastest decade in terms of urbanization, with a 13.45 percent increase in the share of urban population. In a decade, China’s urban population expanded by over 200 million, forming the largest scale urbanization in human history.

Managing a Fast-Moving Society

A result that may surprise many is that migration and population resettlement are producing a phenomenon of China's “hollowing from the center.” Provinces such as Chongqing, Sichuan, Guizhou, Hubei, Anhui, and Gansu have lost people, whereas Guangdong in the Pearl River Delta and Zhejiang in the Lower Yangzi Delta have seen their population size growing by 21 and 16 percent respectively. Perhaps to the disappointment of some Chinese policymakers, the Great Western Development strategy in the last decade did not seem to help these poor provinces retain their laborers. To the contrary, China’s largest cities saw the fastest increase in population size: Tianjin by 29.3%, Shanghai 38%, and Beijing, despite serious government efforts to control its expansion, by 42% percent. As people follow resources and opportunities, it is not hard to figure out why Beijing grew so fast.

A fast moving and urbanizing China reflects the far-reaching economic and social transformations China has undergone in the last few decades. This new demographic profile also presents new challenges to the Chinese government. With one in six Chinese on the move and with the population more connected by the Internet than by residence, it is increasingly difficult for the government to control the population. At the same time, the need to establish a national social safety net is made more urgent and apparent. China has little time to establish and to improve a nationwide pension scheme, and a medical insurance program that does not discriminate segments of the population, and that is portable across regions.

A population aging process that is faster than previously believed also carries important economic, social, as well as political implications. Continued low fertility with accelerating aging -- for a country where the overall economy has grown rapidly but measured at a per capita basis is still at a very low level -- raise concerns not just for labor supply but also for the ability of the government and families to support a rapidly expanding elderly population. Currently over 40 percent of all mid-aged Chinese couples have only one child, and the ratio of workers to retirees aged 60 and above will drop from roughly 6 to 1 in 2000 to barely 2 to 1 by 2030. Challenges in delivering promised entitlements and services to the population due to aging, which simultaneously reduces the share of taxpayers and increases that of benefit recipients, will test the government’s ability to meet widespread popular expectations.

A Wakeup Call for Policymakers in Beijing

For too long, Chinese policymakers have buried their heads in the sand. Scholars have been calling for almost decade to abandon the outdated one-child policy, which both is costly to Chinese families and to the government as well and has little use in face of a fertility that has been below the replacement level (2.1 children per woman) for two decades.

Scholars and the public have also been calling for a faster removal of the hukou (household registration) system and revamping the fragmented social security and health care systems, as both as currently operating are increasingly incompatible with a mobile and rapidly urbanizing population. Such calls have typically been met with more caution than action, sometimes even with censorship and suppression. It is possible that top leaders have been provided with erroneous information coupled with misleading reasoning (that demography, not economic performance, is the source of unemployment, for instance) by their subordinates. But slow reactions have cost much precious time already.

Leaders in Beijing must have had the chance to preview the census results released last week and may even be a bit taken back by these results. They were probably dismayed that the sex ratio at birth is now 118 boys to 100 girls, having actually edged up from ten years ago. But they should be even more concerned with the reality that time may have been running out in confronting China’s population aging. It is no coincidence that two days before the census release date the Politburo members gathered for a crash course in demography, identified as a collective study session held in Zhongnanhai. On the eve of the census news conference, Chinese President Hu Jintao went on national television to call for continued efforts to stabilize low fertility but at the same time to suggest unspecified improvements in birth control policy. Such a move is quite timid when compared with China’s neighbor Russia, where Premier Putin just announced a $53 billion program to raise its birth rate by 2015. China could take a lesson from Russia, where repeated government efforts to raise birth date have produced little result.

A census release is normally hardly a newsworthy event, and census results do not typically bring surprises. But for the largest population in the world, the latest census has turned out to involve both. The nearly ten million Chinese who worked as census takers have delivered what should be considered a wakeup call to China's leaders.

Authors

Feng Wang

Image Source: © Carlos Barria / Reuters

Long-Term Implications of the Demographic Transition in China

Feng Wang — Tue, 22 Mar 2011 14:18:00 -0400

INTRODUCTION

China has been an overachiever in the global process of demographic transition in the second half of the twentieth century. Its mortality decline was unparalleled in human history among populations of significant size, consequently setting the stage for rapid population growth. In turn, rapid population growth laid the foundation for an unprecedented state intervention in birth control. China’s fertility decline in the closing decades of the twentieth century was perhaps even more extraordinary for its speed and especially for the measures taken and the authorities involved. With China’s fertility now well below replacement level, what lies ahead for this demographic overachiever? In this chapter I examine three issues related to China’s demographic transition. First, I briefly review the demographic transition in China. Second, I discuss the role of the Chinese state, a particularly salient aspect of the demographic transition and one that has attracted much attention and caused a good deal of confusion. Third, using population projections, I highlight a few important features of China’s demographic future, deriving in large part from its status as a demographic overachiever.

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Publication: Population and Development Review: Volume 37

The One Child Policy Turns 30: China’s New Population Challenges

Mon, 04 Oct 2010 14:00:00 -0400

Event Information

October 4, 2010
2:00 PM - 3:30 PM EDT

Saul/Zilkha Rooms
The Brookings Institution
1775 Massachusetts Avenue, NW
Washington, DC 20036

Faced with growing concerns over the potential economic and social cost of an anticipated population explosion, China’s state planners in 1980 introduced a controversial law – known in the United States as the “one child policy” – that placed strict limits on the number of children a couple was allowed to have. While the role played by the population controls is subject to some debate, China’s policymakers are now confronted by a new demographic challenge: a rapidly aging population that threatens to strain the social safety net and disrupt labor markets. In a sign of the government’s shifting priorities, some localities in China are now taking tentative steps to relax the population controls and in some cases are even encouraging couples to have additional children.

On October 4, the John L. Thornton China Center at Brookings hosted a discussion of China’s looming demographic challenges and the social and economic impact of the one child policy. Senior Fellow Kenneth Lieberthal, director of the John L. Thornton China Center, provided introductory remarks and moderated the discussion. After the program, panelists took audience questions.

Audio

The One Child Policy Turns 30: China’s New Population Challenges

Transcript

Event Materials

Participants

Moderator

Kenneth Lieberthal

Senior Fellow and Director, John L. Thornton China Center

Panelists

WANG Feng

Senior Fellow and Director, Brookings-Tsinghua Center

Vikram Nehru

Chief Economist, East Asia Region; and Director for Poverty Reduction, Economic Management, and Private and Financial Sector Development; The World Bank

Deborah S. Davis

Professor of Sociology, Yale University

China’s Population Destiny: The Looming Crisis

Feng Wang — Thu, 30 Sep 2010 00:00:00 -0400

Observers of China’s rise, when assessing the implications for global peace and prosperity, have largely focused their attention on the country’s economy, on its energy and resource needs, on the environmental consequences of its rapid expansion, and on the nation’s military buildup and strategic ambitions. Yet, underlying all these dazzling changes and monumental concerns is a driving force that has been seriously underappreciated: China’s changing demography.

With 1.33 billion people, China today remains the world’s most populous country. In a little more than a decade, however, it will for the first time in its long history give up this title, to India. But, even more important, China’s demographic landscape has in recent decades been thoroughly redrawn by unprecedented population changes. These changes will in the future drive the country’s economic and social dynamics, and will redefine its position in the global economy and the society of nations. Taken together, the changes portend a gathering crisis.

One number best characterizes China’s demographics today: 160 million. First, the country has more than 160 million internal migrants who, in the process of seeking better lives, have supplied abundant labor for the nation’s booming economy. Second, more than 160 million Chinese are 60 years old or older. Third, more than 160 million

Chinese families have only one child, a product in part of the country’s three-decade-old policy limiting couples to one child each. (The total populations of countries like Japan and Russia do not reach 160 million; Bangladesh’s population is roughly equal to that number.)

But the relative size of these three Chinese population groups of 160 million will soon change. As a result of the country’s low fertility rates since the early 1990s, China has already begun experiencing what will become a sustained decline in new entrants into its labor force and in the number of young migrants. The era of uninterrupted supplies of young, cheap Chinese labor is over. The size of the country’s population aged 60 and above, on the other hand, will increase dramatically, growing by 100 million in just 15 years (from 200 million in 2015 to over 300 million by 2030). The number of families with only one child, which is also on a continued rise, only underscores the challenge of supporting the growing numbers of elderly Chinese.

Why should one care about these demographic changes, and why should the overused label “crisis” be attached to such slow-moving developments? The aging of China’s population represents a crisis because its arrival is imminent and inevitable, because its ramifications are huge and long-lasting, and because its effects will be hard to reverse.

Political legitimacy in China over the past three decades has been built around fast economic growth, which in turn has relied on a cheap and willing young labor force. An aging labor force will compel changes in this economic model and may make political rule more difficult. An aging population will force national reallocations of resources and priorities, as more funds flow to health care and pensions.

Indeed, increased spending obligations created by the aging of the population will not only shift resources away from investment and production; they will also test the government’s ability to meet rising demands for benefits and services. In combination, a declining labor supply and increased public and private spending obligations will result in an economic growth model and a society that have not been seen in China before. Japan’s economic stagnation, closely related to the aging of its population, serves as a ready reference.

China’s demographic changes will also have far-reaching implications for the world economy, which has relied on China as a global factory for the past two decades and more. The changes may also affect international peace and security. An aging population is likely to lead to a more peaceful society. But at the same time, the projected 20 to 30 million Chinese men who will not be able to find wives, due to the country’s decades-long imbalanced sex ratio at birth, may constitute a large group of unhappy, dissatisfied people. Claims that these future bachelors will harbor criminal intentions and a propensity to form invading forces against China’s neighbors are unsubstantiated and overblown. Still, the fact that such a large number of Chinese men will not be able to marry is clearly a serious social concern, and the issue should not be neglected.

What also makes China’s demographic future a looming crisis is that, so far, the changes have largely taken place under the radar. This is so in part because China still has the world’s largest population and its population is still growing. It is also due in part to a continued tendency in China and elsewhere to believe that overpopulation is the root cause of all problems. Hence China’s hesitation, even reluctance, to phase out its one child policy—an important cause of the country’s demographic challenges.

Something little understood by the outside world, and indeed to the Chinese government and public, is that today’s demographic changes mark only the beginning of a crisis that will be increasingly difficult to mitigate if action is not taken soon.

A new era

China has entered a new demographic era. Its mortality rate has dropped to a level not very different from that of the developed countries. It fertility has dropped to a level lower than that of many developed countries, including the United States, Britain, and France—indeed, it is among the lowest in the world. And China has witnessed the largest flow of internal migrants in world history, resulting in an urbanization process that is of comparable historical proportions. These forces combined have created a population that is rapidly aging and rapidly urbanizing.

China’s mortality over the past three decades has been on a path of continuous decline. Despite concerns over the collapse of the rural collective public health care system in the 1980s and increasing incidents and reports of air pollution, food poisoning, and public health crises (such as the SARS epidemic in 2003), the Chinese population’s overall health has continued to improve with the spread of affluence. The latest numbers based on nationally representative surveys put life expectancy at birth at 74.5 years for females and 70.7 for males, levels that approach those of the world’s more developed countries. Longer life expectancy means more old people in the population and an increasing demand for services and expenditures related to health care. But more important than increased life expectancy in defining China’s new demographic era—and determining

China’s demographic future— is declining fertility. For nearly two decades, the average number of children a couple is expected to produce has been less than 2, recently falling as low as approximately 1.5. Such a number is below the replacement level (the level required for a population to maintain its size in the long run).

China’s low fertility, however, is a fact that has been established as real only relatively recently, in part because of problems associated with deterioration in the country’s birth registration and statistical data collection system, and in part because of the government’s reluctance to acknowledge declining fertility. The current period of fertility decline began quietly and remained unnoticed for almost a decade. When the first signs that fertility had dropped below the replacement level were reported in the early 1990s, they were quickly dismissed in the context of what was believed to be widespread underreporting of births.

By the turn of the twenty-first century, China’s demographic transition could no longer be doubted. Today the national fertility level is around 1.5 and possibly lower. In the country’s more developed regions, fertility has been even lower for more than a decade—barely above 1 child per couple, a level that rivals the lowest fertility rates in the world.

The ripple effects of fertility decline have begun to emerge everywhere in China these days. In 1995, primary schools nationwide enrolled 25.3 million new students. By 2008, that number had shrunk by one-third, to only 16.7 million. In 1990, China had over 750,000 primary schools. By 2008, due to the combined effects of fertility decline and educational reforms, the number of primary schools nationwide had fallen to about 300,000. In a country where getting into a university has always been a matter of intense competition and anxiety, the number of applicants to universities has begun to decline in the past couple of years.

The challenges posed by these demographic changes will be more daunting in China than in other countries that have experienced mortality and fertility declines. The reason for this does not lie in the size of China’s population, but in the speed with which the People’s Republic has completed its transition from high to low birth and death rates. China has achieved in 50 years—increasing life expectancy from the 40s to over 70—what it took many European countries a century to accomplish. In 2000, when the ratio of income levels in the United States and China was still about 10 to 1, female life expectancy in China was only about five years below that of the United States (75 versus 80). China, in other words, completed its mortality-decline transition while per capita income was still at a very low level.

Major fertility reduction in China took even less time. In just one decade, from 1970 to 1980, the total fertility rate (TFR) was more than halved, from 5.8 to 2.3, a record unmatched elsewhere. (TFR extrapolates an average woman’s fertility over her lifetime from a society’s fertility rate in a given year.) In contrast to Western European countries, where it took 75 years or longer to reduce TFR from around 5 to the replacement level, in China a similar decline took less than two decades. As a result, in 2008, China’s rate of population growth was only 5 per thousand, down from over 14 per thousand in 1990 and 25 per thousand in 1970. Such a compressed process of demographic transition means that, compared with other countries in the world, China will have far less time to prepare its social and economic infrastructure to deal with the effects of a rapidly aging opulation.

And for the People’s Republic the challenge is all the more difficult because the country is undergoing an economic upheaval at the same time that its population is rapidly changing. While China continues to transform itself from an agrarian to an industrial and post-industrial society and from a planned to a market-based economy, it not only will need, for example, to provide health care and pensions for a rapidly growing elderly population that has been covered under government-sponsored programs. It also will need to figure out how to expand the scope of coverage to those who were not covered under the old system.

Reversal of fortunes

China’s astonishing economic expansion over the past two decades took place within a highly, almost uniquely favorable demographic context. But the country is at the end of reaping economic gains from a favorable population age structure.

Economic growth relies on a number of basic factors. Aside from institutional arrangements, these include capital, technology, markets, and labor. In China’s case, foreign direct investment, especially from overseas Chinese, brought not only capital but also technology and management know-how. Foreign consumer demand, especially in the United States (fueled first by the dot-com boom and then by the housing and stock market boom), supplied a ready market for China’s export industries. But capital, technology, and overseas markets alone would not have made China a global factory in the last two decades of the twentieth century. The country’s economic boom relied on another crucial factor: a young and productive labor force.

Such a labor force, a non-repeatable historical phenomenon resulting from a rapid demographic transition, was fortuitously present as the Chinese economy was about to take off. The large birth cohorts of the 1960s and 1970s were at their peak productive ages when the boom began. This good fortune, measured as a demographic dividend, is estimated to have accounted for 15 to 25 percent of China’s economic growth between 1980 and 2000.

The term “demographic dividend” refers to gains (or losses) in per capita income brought about by changes in a population’s age structure. It is expressed as the ratio of the growth rate of effective producers to the growth rate of effective consumers. It resembles but is not the same as the commonly used “dependency ratio,” which is the ratio of the dependent-age population (such as 0–14 years old and 60 and above) to the productive-age population (such as 15–59 or 20–59). The demographic dividend, unlike the dependency ratio, takes into account people in the productive age cohort who are not contributing to income generation (for example, because they are unemployed) as well as those within the dependent age range who generate income (such as from after-retirement earnings).

For the most part, China has exhausted its demographic fortune as measured by the demographic dividend—that is, by the changing support ratio between effective producers and effective consumers. Between 1982 and 2000, China enjoyed an average annual rate of growth in the support ratio of 1.28 percent. Using the World Bank’s figure of per capita annual income growth during this same period, 8.4 percent, we find that the demographic dividend accounted for 15 percent of China’s economic growth. Today, the net gain due to favorable demographic conditions has been reduced to only one-fifth of the average level maintained from 1982 to 2000.

By 2013 China’s demographic dividend growth rate will turn negative: That is, the growth rate of net consumers will exceed the growth rate of net producers. Starting in 2013, such a negative growth rate will reduce the country’s economic growth rate by at least half a percentage point per year. Between 2013 and 2050, China will not fare demographically much better than Japan or Taiwan, and will fare much worse than the United States and France.

As a result of China’s very low fertility over the past two decades, the abundance of young, inexpensive labor is soon to be history. The number of workers aged 20 to 29 will stay about the same for the next few years, but a precipitous drop will begin in the middle of the coming decade. Over a 10-year period, between 2016 and 2026, the size of the population in this age range will be reduced by about one-quarter, to 150 million from 200 million. For Chinese aged 20 to 24, that decline will come sooner and will be more drastic: Over the next decade, their number will be reduced by nearly 50 percent, to 68 million from 125 million.

Such a drastic decline in the young labor force will usher in, for the first time in recent Chinese history, successive shrinking cohorts of labor force entrants. It will also have profound consequences for labor productivity, since the youngest workers are the most recently educated and the most innovative.

As the young population declines, domestic demand for consumption may weaken as well, since young people are also the most active consumers of everything from wedding banquets to new cars and housing units. And because China is a major player in the global economy, the impact of the country’s demographic changes will not be limited by its borders.

Fragile families, fragile society

So far, observers of China’s demographic changes have focused most of their attention on consequences at the aggregate or societal level: the size of the labor force, of the elderly population, and of the number of men who will not be able to marry. Worries at this level of analysis generally relate to the country’s future economic growth and social stability. But the challenges that China will face as a result of its changing demographics go far beyond economic growth and other aggregate concerns.

China’s unprecedented population control policy, the one-child policy, turned 30 this year. It has forcefully altered the family and kin structure of hundreds of millions of Chinese families. And families, in addition to their other functions, are first and foremost the primary source of support for dependents, the young and the elderly.

Because the population control policy has been in place for so long, many Chinese couples, especially in the more affluent urban areas, have had only one child. Current government policy still requires nearly two-thirds of all families to have no more than one child per couple. Although policy implementation has varied over time and across different regions, almost all urban Chinese couples have observed the one-child rule for the past three decades. With the current birth control policy in place amid continued low levels of fertility, by the middle of the current century, half of Chinese women aged 60 are projected to have had only one child. This is a development unprecedented in both China’s and the world’s history.

Although the full extent of the one-child policy’s societal consequences will not be known until later, it is safe to predict that the social costs that China will need to pay, especially in terms of family support for aging parents, will be exceedingly high. In no small part due to implementation of the one-child policy, China by 2005 had accumulated nearly 160 million only children aged 0 to 30. That number has further grown in the past five years. These figures imply that over 40 percent of Chinese households have only one child.

That such a huge share of Chinese families have only one child, despite the fact that many parents would have liked to have more, presents serious economic and social risks for individuals, and for the whole society. Fragile families mean a fragile society. The tragic deaths of thousands of only children in the earthquake of May 2008 in Sichuan province highlighted the potential for extreme misfortune.

More generally, ever more Chinese parents in the future will not be able to count on their children in their old age. And many parents will face a most unfortunate reality: outliving their children and therefore dying alone. Given the current mortality schedule, the likelihood that an 80-year-old Chinese man will see his 55-year-old son die before he does is 6 percent. Because women live longer, the likelihood that an 80-year-old woman will outlive her 55-year-old son is 17 percent.

Due to these odds, and the large numbers of Chinese parents who have only one child, the sheer number of elderly people living without any children is significant and growing. This creates grim prospects for many Chinese who hope in old age to rely on their children for emotional and physical if not financial support.

Prospects and policy options

Because of China’s continued mortality decline, and especially its sustained fertility decline to below replacement levels, the country has effectively entered an era of population decline. China’s current TFR of 1.5 implies that, in the long run, each future generation will be 25 percent smaller than the one preceding it. China’s population is still growing, albeit very slowly, because the country still has a relatively young age structure, which produces more births than deaths, even though on average each couple has fewer than two children. Had it not been for China’s relatively young age structure, the population would have begun declining in the early 1990s, almost two decades ago. The current growth, in other words, is a result of population momentum.

The same force of momentum will work in the opposite direction soon. Given current mortality and fertility rates, and with a population age structure that is growing increasingly older, the number of deaths will soon exceed the number of births. China’s population is likely to peak less than 15 years from now, below a maximum of 1.4 billion. After that will come a prolonged, even indefinite, population decline and a period of accelerated aging.

Even if China can restore fertility to replacement level within 10 years after the country reaches its population peak, population will still exhibit a decline nearly half a century long, with a net population loss of over 200 million, if not more. The median age of the Chinese population, at its peak, could be as high as 50 years.

China is by no means unique in experiencing below-replacement fertility. In the past decade, below-replacement fertility has become a new global reality. Whereas in some parts of the world high fertility rates continue to pose severe challenges to women and children’s health, for more than half of the world’s population, below replacement fertility is now the norm.

In Europe, North America, and East Asia, prolonged below-replacement fertility has already set in motion a negative population growth momentum. In the most extreme cases, such as Italy and Japan, population could be reduced by half in as few as 40 years or so if current rates of reproduction persist. A gradual but substantial reduction in population, especially with a concomitant aging of populations in the world’s richest countries, constitutes an unprecedented shift that is redefining the global demographic, economic, and political landscape.

What makes China unique, however, is that it still has a state policy, unique in human history, that restricts the majority of Chinese families to one child per couple. At the time the policy was announced 30 years ago, it provoked great controversy both within and outside China; over the years it has extracted great sacrifices from Chinese families and individuals, especially from women. And although the policy was designed as an emergency measure to slow down China’s population growth, and was intended to last for only one generation, the government has not yet shown the willingness, or courage, to phase it out.

China’s slow recognition and inaction in the face of its impending demographic crisis—inaction that persists despite appeals by almost all the country’s population experts to phase out the one child policy quickly—reflect policy makers’ lack of understanding of the changing demographic reality. Inertia also results from the resistance of the country’s birth-control bureaucracy, which formally employs half a million people.

This exemplifies a characteristic feature of China’s regime—relegating difficult, long-term, structural challenges to the back burner, while giving priority to short-term crisis management and concerns about stability. The looming demographic crisis will largely define China in the twenty-first century. Given that demographic changes take time to develop, and that their ramifications are not only massive but also long-lasting, China’s inaction has already proved costly—and will only grow more so the longer it persists.

Authors

Feng Wang

Publication: Current History

China’s One Child Policy at 30 Years

Feng Wang and Cai Yong — Fri, 24 Sep 2010 15:22:00 -0400

Thirty years ago today, in what appeared as an open letter to members of the Communist Party and the Communist Youth League, the Chinese government announced publicly its “one child per couple” birth control policy. In thirty years, this most ambitious birth control policy in world’s history has affected the lives of a billion, and changed the face and fate of a nation. Today, the one child policy is still very much in place -- nearly two thirds of all Chinese couples are still required to have only one child.

Even before its inception, the one child policy was questioned for its necessity and its enormous social costs. At the time of the policy’s announcement, China had already achieved a remarkable fertility reduction, halving the number of children per woman from 5.8 in 1970 to 2.7 in 1979. The one child policy, critics warned, would forcefully alter kin relations for Chinese families, and result in accelerated aging, among others. To enforce a policy that is so extreme and unpopular for families who relied on children for labor and old age support, physical abuses and violence would be inevitable.

Many of the feared consequences of the one child policy have now become apparent. China’s recorded sex ratio at birth has been on a rise since the inception of the policy, escalating from 108 in 1980 to over 120 boys for every 100 girls today, resulting in an estimated 20 to 30 million surplus men. Families with only one child are now estimated at around 150 million, accounting for a third of all Chinese households. China’s only children generation will assume the role of sole caretakers of their aging parents, and will be the ones to shoulder rising government expenditure obligations for future pension, health care, and social welfare benefits associated with an increasingly aging population.

China’s one child policy may have hastened a fertility decline that was already well in progress, but it is not the main force accounting for China’s low fertility today. The claim by Chinese officials that the one child policy has helped avert 400 million births simply cannot be substantiated by facts. Most of China’s fertility decline occurred prior to the one child policy. In countries without a forceful and costly policy as China’s, birth rate has declined with similar trajectories and magnitude. South Korea, for instance, had a fertility similar to China’s in 1979, at 2.9 children per woman. In 2008, it dropped to 1.2. Thailand’s fertility dropped from 3.6 in 1979 to 1.8 now. Brazil’s fertility was 4.2 in 1979. In 2008, it was 1.9.

For the same reason, China’s one child policy should not be taken as a model for the world’s environmental preservation and climate control. The rising energy usage and pollution level in China is driven mostly by its economic development model and change in consumption pattern, not population growth. Between 1990 and 2007, petroleum consumption in China increased by 189 percent, natural gas by 375 percent, and electricity by 424 percent. During the same period, population size grew by only 16 percent. CO2 emission since the mid 1990s increased by over 50 percent in one decade, while population growth during the same time period was only 8.5 percent.

Young couples in China nowadays restrict their childbearing out of economic concerns, as couples elsewhere do. For nearly two decades, China’s fertility level has been under the replacement level of 2.1 children per couple, with a fertility level that is widely believed to be around 1.5 in recent years. Such a level resembles that in Italy, Japan, and Russia where population decline has already begun, but much below that in the United States, England, or France. Decades-long very low fertility level is setting China up for a prolonged demographic challenge; had it not been for China’s relatively young age structure, China’s population would have begun to shrink in size.

The rippling effects of low fertility are increasingly visible everywhere in China today. In 1995, Chinese elementary schools enrolled 25.3 million new students. In 2008, that number shrunk by one-third, to only 16.7 million. Between 1990 and 2008, 60 percent of Chinese elementary schools were closed down, resulting from declining birth numbers and school reorganizations. The number of young laborers aged 20 to 29 has already come down by 14 percent in the last ten years, and is projected to shrink further, by an additional 17 percent, in the next two decades. Chinese elderly aged 60 and older, in contrast, will increase from 165 million now to 240 million in 2020, and over 340 million by 2030, accounting for 25 percent of the total population.

As China’s one child policy reaches its thirtieth anniversary, policymakers in China have yet to demonstrate an understanding and leadership to end a policy that was pushed through without much deliberation and debate, and that is clearly out of date today in view of China’s new demographics.

Instead of stepping on the brakes in a demographic vehicle that is going downhill, by continuing the one child policy, China’s policymakers are still pressing on the gas pedal.

Authors

Feng Wang
Cai Yong

WANG Feng Named Senior Fellow and Director of the Brookings-Tsinghua Center in Beijing

Fri, 17 Sep 2010 10:47:00 -0400

WANG Feng, one of the world’s leading experts on demographic and social change in China, has joined the Brookings Institution as senior fellow and director of the Brookings-Tsinghua Center for Public Policy in Beijing, China, Brookings President Strobe Talbott announced today.

“We are delighted to have Dr. Wang as a member of the Brookings team and look forward to his leadership of the Brookings-Tsinghua Center,” said Talbott. “As a global think tank we are committed to bringing expertise, balance and diverse viewpoints to the public policy discussion. His work will enhance the center’s capabilities as a platform for research on China and U.S.-China relations.”

Wang will join the Foreign Policy program at Brookings. He was previously chair of the Sociology Department at the University of California, Irvine. He is one of the foremost scholars of contemporary Chinese society, with much of his recent research focusing on the massive demographic and social transformations that have accompanied China’s rapid economic development. His work has touched on some of the most challenging and important issues China now faces, particularly the social, economic and political ramifications of the country’s declining fertility rates in conjunction with its three-decades long one child policy.

“I am very pleased that Dr. Wang has agreed to serve as the director of the Brookings-Tsinghua Center,” said Kenneth Lieberthal, senior fellow and director of the John L. Thornton China Center at Brookings. “His outstanding research skills and excellent reputation in both the United States and China bode exceptionally well for the center’s growth and impact.”

“Dr. Wang is considered a leading thinker in the Chinese academic community. I am confident that the Brookings-Tsinghua Center will benefit greatly from Dr. Wang’s cutting-edge research and his innovative approaches to examining China’s social and economic landscape,” said Lan Xue, dean and professor at the School of Public Policy and Management at Tsinghua University in Beijing, China and a nonresident senior fellow with the John L. Thornton China Center.

Wang was born in China and went on to build a successful academic career in the United States. He has been at the University of California, Irvine since 1996. He received his Bachelor of Arts degree in economics from Hebei University in China and holds a Ph.D. and an M.A. in sociology from the University of Michigan. Over the years, his in-depth field research on China has been published extensively in both English and Chinese.

The Brookings-Tsinghua Center is a partnership between the Brookings Institution and Tsinghua University. Established in Beijing in 2006, the center serves as a platform for American and Chinese scholars to provide analysis and to discuss China’s development and the U.S.-China relationship.

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Feng Wang — Mon, 01 Jan 0001 00:00:00 -0500

Authors

Feng Wang

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Mon, 01 Jan 0001 00:00:00 -0500

Authors

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Feng Wang — Mon, 01 Jan 0001 00:00:00 -0500

Authors

Feng Wang