Chinese May be Encouraging Higher Birth Rate as a Way Out of the Demographic Conundrum

Thanks to William Dobbins for pointing me to an article today in Stratfor.com speculating on the outcome of the current leadership meetings in China--the Third Plenary Session of the 18th Communist Party of China Central Committee--which ended today. 

According to the communique broadcast by state mouthpiece China Central Television, important policy changes include the establishment of a committee to guide the country’s comprehensive reform agenda, the establishment of an integrated National Security Committee responsible for coordinating public safety and national strategy, and the easing of the country's 33-year-old family planning policy to allow more couples to have a second child.

In light of China's imminent demographic imbalance, the changes to family planning were expected. The country's massive pool of cheap labor previously underpinned its economic and social transformation, but as China prepares to transition toward a consumer-based economy, its aging population is a problem.

Admittedly, China has moved well beyond the massive economic mismanagement and social disorder of the post-Cultural Revolution period. However, the inevitable loss of the demographic advantages that sustained the country's economic miracle, combined with the prevailing social inequality and regional disparities as well as the rising political awareness of the middle class, mean the new leadership is facing even greater challenges to preserve its legitimacy. Doing so requires a constant commitment by political leaders to respond to China's changing internal and external environments. It also requires a path toward reform that meets public expectations while overcoming anti-reform elements.

The problem, as I have noted before, is that it is not clear that Chinese couples are interested in having more children. I discuss in Chapter 6 the fact that Chinese fertility was already declining before the One-Child Policy implemented--meaning that low fertility was not a response to government policy--and the government may have little influence on raising fertility either.