Fixated on maintaining the country's high-powered economic growth, Chinese
policymakers have been soliciting opinions from economists about how to avoid
future labor shortages by relaxing and even scrapping the rigid one-child
policy.
But the effort has generated a debate over a 25-year-old family-planning
policy that was once considered sacrosanct.
Population experts have clashed with economists about what path China - a
nation of 1.3 billion with scarce farmland and water supplies - should take to
maintain a healthy economic growth and delay the arrival of a graying society
without creating another population explosion.
China's one-child policy, which the government started implementing in 1979,
is widely unpopular inside the country.
The government credits the policy for controlling growth of China's already
huge population and says it would have at least 300 million more people today if
it were not for the measure.
The government's confidence, however, has been dented by a series of studies
in recent years, and demographic evidence suggesting that because of the low
birth rates China is growing old too early and too fast.
Fears have risen that a rapid increase in aged people will put a strain on
the working-age population and slacken economic growth. As China's baby-boomers
born before 1979 start retiring, there will be fewer young people of working age
to take their places and fuel the country's economic powerhouse.
"For 20 years China benefited from its 'demographic dividend', but now we
anticipate that around 2015, this dividend [will] turn into deficit," said Cai
Fang from the Population and Labor Economic Research Institute under the Chinese
Academy of Social Sciences.
Cai's research credits the surge in the number of working-age people, or what
he calls the "demographic dividend", with contributing to 24% of the economy's
growth between 1978 and 1998. But Cai predicts China will see the growth of its
working-age population coming to a halt around 2013 and might begin experiencing
labor-force shortages.
"We are currently witnessing the transformation of China into an
unprecedented aging nation," Li Keping of the National Social Security Fund
Executive Council told a recent meeting on family-planning policy where various
population and economic experts gathered. "What is unique about China's case is
that the aging process is happening before the country has grown rich, and it is
happening too fast."
Chinese economic planners estimate the country will reach its well-off
threshold, or what in Chinese is termed xiaokang (comfortable living), in 2020.
But a national census conducted in 2000 concluded that China had already crossed
into the phase of a rapidly graying nation.
In 2000, people aged 60 or older composed 10% of the population and their
numbers were growing by 3% a year. The demographic state of China that year fit
nicely with the United Nations definition of an aging society - a country or a
region where people aged 60 or older make up 10% of the overall population.
What is more, the numbers in China are rising fast. Chinese demographers
predict that if current population trends persist, by 2035 people aged 65 and
older will make up 20% of the population.
China's national wealth, however, will not be a match to shoulder the burden
of a rapidly graying nation. In 2030, China's annual per capita income will be
about US$11,000 measured in current prices, according to a study by Goldman
Sachs Group in Hong Kong. This would compare with almost $36,000 of annual per
capita income last year in Japan - another rapidly aging Asian society.
With fewer workers supporting growing numbers of elderly, the strain on the
severely underfunded social pension system is expected to grow. The pension
system currently only covers urban Chinese, not rural dwellers who make up the
majority of the population.
Even so, the World Bank estimates that only 160 million urban people, or less
than 15% of China's working-age population at the moment, are covered by the
social-security net.
Feeling insecure about their retirement age, Chinese people are saving at
rates that economists fear might in the future starve the economy of investment
and consumption spending. From 1990 until 2001, the World Bank says, China
ranked No 1 in the world in terms of family savings.
But while economists and population experts agree that a rigid implementation
of the one-child policy is becoming economically counterproductive, they seem to
differ on what to do about it.
The economic lobby, led by prominent economists such as Lin Yifu and Hu
Angang, insist the policy should be steadily and substantially relaxed to ease
labor shortages.
"If not, then China, one of whose economic advantages is labor-intensive
industries, is bound to lose because of the lack of workers," Lin, a professor
of economics at Peking University, told the meeting on family-planning policy
held at the same university.
Hu, a researcher on economic policies at Thsinghua University, warned that if
the current one-child rule remains in place, then by 2050 India will have 200
million more people of working age than China, positioning the latter at a
disadvantage with one of its major economic competitors.
But population experts counter that the one-child policy is no longer as
harsh as it used to be. In fact, they say, about 30% of the population currently
are allowed to have two children.
Many rural couples may have a second child, especially if their first is a
girl; in the cities a husband and wife who each are the products of
single-children families also may have two children.
Some demographers have even accused the economic view of China's population
trends as being shortsighted, given the country's lack of land and water
resources.
"Economists only consider the developments over the next 20 or 30 years,"
Renmin University population expert Wu Cangping said. "But demographers have to
take a longer view and think about the next two or three generations. If we
allow the birth rates to go up now, then 60 years from now we would be faced
with another baby boom."