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  • Dec 22, 2014
  • Updated: 10:54am

Ending one-child policy won't solve Guangdong's problems

PUBLISHED : Wednesday, 13 July, 2011, 12:00am
UPDATED : Wednesday, 13 July, 2011, 12:00am

Guangdong is appealing to Beijing for a local relaxation of the central government's 32-year-old one child policy.

As the South China Morning Post reported yesterday, economists are beginning to worry that the mainland's ageing population will soon begin to slow the country's rapid growth as the size of the workforce shrinks and the cost of supporting an increasing number of retirees mounts.

But while it's true that unfavourable demographic trends will limit future growth rates in Guangdong, scrapping the one-child policy won't solve the problem.

At first glance it doesn't look as if Guangdong has much reason to worry. The province is the country's most populous, with 104 million inhabitants last year, according to official estimates.

Guangdong also boasts the biggest economic output of all the provinces, and is one of the country's wealthiest on a gross domestic product per capita basis.

More to the point, Guangdong has also seen rapid population growth over recent years, averaging an impressive annual rate of 3.4 per cent between 2000 and last year, compared with a flaccid 0.6 per cent rate for the mainland as a whole (see the first chart).

Yet on closer examination the picture is less encouraging. Most of Guangdong's population growth has come from migration, as tens of millions of workers have flocked from poor inland provinces in search of higher incomes in the Pearl River Delta's booming factories. According to estimates derived from 2005 census data, more than a quarter of Guangdong's inhabitants are recent migrants.

But although many migrants stay in the province, many return home after a few years, which means Guangdong requires a constant influx of eager workers from elsewhere on the mainland to keep its industries humming.

Now, with opportunities improving inland, officials are growing concerned that this flow may dry up in the coming years. If Guangdong wants to maintain its rapid economic growth, it will have to look closer to home for its workforce.

Here's the problem. Over recent decades, the province's fertility rate has collapsed. In the mid-1970s, a Guangdong woman could expect, on average, to give birth to four children over her lifetime. By the middle of the last decade that number had fallen to just 1.5 (see the second chart). That's considerably lower than the national average, reckoned by the United Nations to be around 1.7, and way below the level of 2.1 children per woman needed to maintain the population in the absence of immigration.

This decline in the fertility rate is usually blamed on the central government's one-child policy, which threatens couples with stiff penalties if they have a second baby.

Now Guangdong officials hope that if they can persuade the central government to ease the policy, the province's birth rate will rise.

Their hopes are almost certainly misplaced. In reality, the one-child policy is only loosely enforced in Guangdong. It is seldom applied in rural areas. And in the province's cities it's said that rich families that choose to have more than one baby simply pay the fine, while poor families have little difficulty avoiding the penalties.

In other words, couples can already have more than one child if they want, but they are choosing not to do so.

This shouldn't be too surprising. Guangdong not only has some of the highest household income levels on the mainland, it is also the country's most urban province - 66 per cent of the population live in cities compared to 50 per cent for the country as a whole - and boasts some of the nation's highest standards of education.

All three factors - income, urbanisation and education - influence birth rates. Put simply, wealthy, well-educated women who live in cities have fewer children, have them later in life, and leave longer intervals between each birth.

In cities where housing is expensive and flats are small the trend is compounded. And in societies where working age adults are expected to provide for their retired parents as well as pay for the education of their children, the tendency to have fewer children is further reinforced.

For many couples, the cost of moving to a bigger flat to house a second child, while looking after four retired parents, is prohibitively high.

Scrapping the one-child policy won't change that.

If you don't believe me, just look at Hong Kong, Macau, Singapore and Taiwan. None of them have a one-child policy. But all are wealthy, well-educated and highly urban societies with high property prices.

And between them, they have the lowest fertility rates in the entire world, averaging just 1.1 children per woman last year, according to the CIA World Factbook.

That's below even Guangdong's limp fertility rate. But on its present trajectory, it looks as if Guangdong is heading in the same direction, with or without the one-child policy.

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