China's Worst Enemy Is Old Age

Beware what you wish for. Birth control was one of the resounding policy successes of the last quarter of the last century. In the early 1970s, women worldwide were bearing an average of 4.3 children; populations in some of the poorest countries were doubling at breakneck speed and demographers were predicting that the world would contain 16 billion or more people before the demographic express hit the buffers of famine and war.

Alarmed, governments threw themselves into family planning — nowhere more strenuously than in China. In 1979 Deng Xiaoping unceremoniously binned Mao’s proclamation, “China’s strength is its countless people”, introducing a coercive “one child” policy buttressed by penalties ranging from heavy fines to compulsory abortions.

The turnaround has been dramatic. In more than 70 countries, birthrates have fallen below replacement level. The demographic timelag — babies born 30 years ago are now raising families — means that the global total continues gently to rise, but within 40 years should level out at a manageable 9 billion.

For the planet, this is good news; but the downside is a different, never before seen, demographic crunch. When people are not only having fewer babies, but living 30 to 40 years longer than they did a century ago, the result is more pensioners — and fewer workers to look after them. By 2050 two billion people — more than one in five — will be over 60. In rich countries, the proportion will be one in three. The implications are dramatic: labour shortages, slower growth, and higher taxes to pay bills for pensions and long-term care. The West’s problems are, however, nothing compared to the social and economic catastrophe shaping in China.

The one-child policy has, in its own harsh terms, worked: reducing births by between 300 and 400 million. But it has induced a premature, and alarmingly rapid, ageing process. China has given itself a rich country’s problem before it has become rich: for all its economic performance, Chinese incomes are still nowhere near as high as those in Western societies at the point when they started to age.

The one-child policy gave China the best of all worlds — a seemingly limitless labour supply and an artificially low dependency ratio. But the labour force will start shrinking a mere six years hence; elderly dependants will outnumber children within 20 years; and by mid-century the labour force will have plunged by 23 per cent. A third of Chinese will then be over 60 — 438 million, outnumbering the entire population of the US. And there will be only 1.6 working age adults per pensioner, compared with seven before 1979.

This means that hundreds of millions of elderly will depend on shrinking families. Beijing is reluctant to divert public investment from physical to social infrastructure; yet failure to do so will render the “harmonious society” unstable. Unpaid pensions are already a potent grievance.

Not only do safety nets barely exist, but the basic social services that communism used to guarantee are long gone. With the shutting or privatisation of state-owned enterprises, the “iron rice bowl” that gave factory workers housing, education, healthcare and pensions cracked two decades back. Rural workers — the majority even now — never had pensions and have now lost free education and healthcare as well.

China has compressed into a single generation transformations that would rock the stability of any society. But the consequences of the one-child policy may prove the toughest of all. Always an affront to human rights, it also portends economic trouble. Abortion rates are officially admitted to be appalling — 13 million a year, a statistic that does not include abortions performed in unregistered clinics or the 10 million one-off abortion pills sold every year. Not only that: in a statistic that has past, present and future heartache written all over it, in China today there are 50 million more males than females — of whom 32.7 million are under 20. A society already short of brothers and sisters is running short of daughters-in-law as well.

The rules have gradually been relaxed. In an effort to curb abortion of female fetuses and infanticide of baby girls, exceptions may be made for rural couples whose first child is female. To ease the burden known as 4-2-1 — only children may be little emperors when young, but end up burdened, under a law passed in 1996, with the obligation to care for two parents and four grandparents — couples from one-child families are allowed two babies. But when Shanghai last month announced that it would encourage “eligible” couples to have a second child, it was attacked in China’s official media for “talking as if Shanghai were an independent republic”.

After 30 years of indoctrination, China probably could not revert to big families even if it wanted to. Urbanisation leads to smaller families, and social mobility has weakened faith in more children as insurance for old age. China has no realistic choice but to grow old gracefully. But the cost of providing for tomorrow’s pensioners is bound to dampen growth even before the workforce starts to decline. This might not be “China’s century” after all.

 

 

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