A customer holds a child while shopping at a supermarket in Shenyang, Liaoning province, June 9, 2013.Sheng Li/Reuters
When Deng Xiaoping, then China's paramount leader, issued his edict in the late 1970s that families could have no more than one child, the architect of China's transformation into an economic powerhouse could not have known that the measure would unleash a demographic time bomb that threatens to undo that achievement.
Beijing's fear at the time was that if the world's biggest population – then close to one billion – kept growing at the same pace, it would strain already thin resources and hamper efforts to boost incomes, a key plank in the modernization platform.
Now, faced with a slowing economy, a shrinking work force and a rapidly aging population, the Communist leaders are formally abandoning the ill-conceived experiment in family engineering. But the demographic and economic impact will be barely discernible.
Even in the unlikely event that there is a sudden baby boom, it would take about two decades to begin producing enough workers to replace the increasing number of aging employees leaving the labour force. And there is no indication that Chinese families have any such desire to produce more progeny. Many urban dwellers seem content with feeding and schooling one child. A 2013 survey of major Chinese cities cited by Capital Economics showed that almost half had no interest in a second child.
And in rural areas, where relaxed policies or lax enforcement have long allowed at least two children, millions have been left in the care of aging grandparents or other elderly relatives or are fending for themselves while their parents toil at jobs in the cities. These migrant workers are discouraged from bringing their children with them and taxing the resources of subsidized schools and health-care services.
The one-child policy had an impact on the birth rate, but experts argue that this was already happening naturally anyway, in step with China's development.
In 1987, when the one-child policy was in full force, Chinese mothers were giving birth to 23.3 babies per 1,000 people. It has fallen steadily since then, reaching 12.1 per 1,000 people in 2013, well below the replacement level. That's the year the policy was eased to allow two children a family if one parent was a single child. By comparison, the U.S. rate stood at about 13.
Neighbouring countries with significantly higher birth rates, such as Vietnam, Malaysia and Bangladesh, moved into better position to attract the lower-wage factory jobs that were at the core of the Chinese growth model.
Now, Beijing is in the midst of another difficult transformation, this time focused on domestic consumption and the development of new technologies and a strong service-based economy to wean the country from its decades-long dependence on those cheap manufacturing exports.
Besides the child-policy change, Communist leaders emerged from a party planning meeting with a renewed pledge to double the economy's size by 2020 from where it stood in 2010. In the midst of such a radical restructuring, this would be an impressive feat. They provided no annual growth targets, but would have to maintain an average expansion of at least 6.5 per cent to 7 per cent to reach their goal.
That seemed plausible until the country's dramatic slowdown amid falling global demand for its exports, weaker-than-expected domestic consumption and worsening financial-sector woes.
The International Monetary Fund and a slew of other China-watchers are forecasting that growth will decline to 6 per cent or less by 2017, which in Chinese terms essentially amounts to a recession. More than a few analysts believe that China is already there, with real annual growth this year hovering closer to 4 per cent than the 6.9 per cent reported in the third quarter.
It's good that China is abandoning a policy that created a huge labour and gender imbalance. It may even boost consumption of baby goods and electronics at some point. But it won't help the country regain its economic footing any time soon.