Two-Child Policy & China's 'Asian Tigerization'

China needs more babies.

That the world's lowest fertility rates belong to Asian tiger economies belies the saying about "being a tiger in bed" to denote virility. In development studies, we are taught about the demographic transition in which large, predominantly rural families make way for small, predominantly urban families. Not only is real-estate and life in general more expensive in cities. but there is less time available to care for the young'uns. The end result is a decline in total fertility rates or the number of live births expected per woman. Apparently, the Asian tigers have taken this lesson to heart since they are at the foot of the world league tables in fertility. They have tons of money anyway, so why complain, right? The CIA World Factbook indicates that the Asian tigers plus Macau are the countries or territories with the world's lowest fertility rates:

220

Korea, South

1.25

2014 est.

221	Hong Kong	1.17	2014 est.

222	Taiwan	1.11	2014 est.

223	Macau	0.93	2014 est.

224	Singapore	0.80	2014 est.

Being so far below the replacement of 2.10 to keep a steady population size, depopulation is inevitable in these places absent mass inward migration. Which brings us to China, ranked 185th in the world at 1.55 according to the same source. Recently, Chinese apparatchiks relaxed infamous one-child policy controls on births given certain conditions such as at least one of the spouses--bastardy is relatively uncommon in China--being an only child. Somewhat surprisingly, the number of applications far undershot projections:

China’s expected baby boom is turning out to be a bust. Not as many married couples as expected are taking advantage of a loosening in China’s one-child policy that allows them to have two children if one spouse is an only child.

Around 804,000 couples applied by the end of September to have a second child, the National Health and Family Planning Commission said in a statement, dramatically short of the annual two million new births projected by health officials as a result of the policy shift announced last November. The shortfall has wide implications for China—from investment by businesses to the country’s tightening labor supply and the vitality of its economy.

But the low figure highlights the demographic challenges facing China, where a rapidly aging society and an array of new health issues are threatening the country’s population growth, its future workforce and economic stability.

The expected windfall for purveyors of paraphernalia and services for tots have been massively disappointed--as have the champions of loosened population controls:

News of the policy change last year brought a frenzy of anticipation from baby-related businesses, with shares of baby-formula producers and even piano makers jumping. Tutoring companies’ shares climbed on the assumption that urban families would fill their cribs and eventually classrooms.

The lack of interest from couples surprised even demographers who have long urged the government to act fast and dismantle the birthing policy altogether, to avoid a collapse in the labor pool. The numbers are “way, way off the mark,” said Wang Feng, a demographer and professor at the University of California at Irvine and affiliated with Shanghai’s Fudan University.

Experts say a combination of factors, including a focus on higher education, bulging costs of living and increased employment migration, have damped the desire for an extra child. China follows a pattern seen in other countries, especially ones with growing middle-class populations. Singapore, for example, offers incentives for babies; yet they often don’t outweigh the load of child-rearing.

Ah yes, the baby-less Asian tigers [sic]. Such may be the fate of China that it will not reach a similar "developed" status before its begins to depopulate, prematurely consigning it to a Japan-like fate before having a taste of such opulence on a nationwide scale:

Low birthrates means new workforce entrants are dwindling while the portion of the elderly is rising, prompting demographers to worry that the government is running out of time to change course. Between 2010 and 2030, China’s labor force is expected to lose 67 million workers, according to projections from the United Nations.

Health and family-planning officials said in the statement they are monitoring population changes to make future policy adjustments. A report from the official Xinhua News Agency this week said there are currently no plans for further policy relaxation.

The two-child policy being a big yawn does raise wider questions about Chinese development that lawmakers should consider. To wit:

1. What constraints are faced by couples of childbearing age in major cities to raising children?
2. What conditions--political, economic, social or environmental--lead couples to put off having children?
3. How will hard-to-reverse demographic trends impact the trajectory of Chinese development?
4. What is it that drives those who acquire wealth and prosperity to wish to leave China?

I suspect the fourth question will reveal the most uncomfortable truths for a totalitarian regime, but hey, desperate times call for removing the facade of all being hunky-dory. Make no mistake: China's prospects going forward have already been affected in a big way by the state poking into all aspects of their citizens' lives. It doesn't take a rocket scientist to figure this out.