China scrapped its decades-old one-child policy in 2016, allowing couples to have up to two children. Now, the central government is increasing the number of children families can have up to three. For years, China had embarked upon a population-planning crusade to rein in the growing number of people in the world’s second-largest economy. Officials employed every measure possible to ensure compliance, including abortion, contraception, and sterilization. Now that the Chinese economy is witnessing the consequences of this disastrous and controversial mechanism, something that the globalists have attempted to mirror in various forms, leaders are adjusting birth limits. To what end?
Three Children Made in China
Xinhua, the official state-run news agency, reported that a Politburo meeting chaired by President Xi Jinping agreed to a significant shift that would let married Chinese couples have up to three children. The new policy was decided after the government discovered a substantial decline in births that has coincided with a rapidly aging population.
The latest National Bureau of Statistics census data highlighted a fertility rate of only 1.3 children per woman in 2020. An aging country requires a replacement level of 2.1. Overall, population growth was the slowest it had been since the 1950s.
Beijing will overhaul its family-planning efforts by offering various supportive measures, such as lower educational costs, tax and housing support programs, and education campaigns to teach young people about “marriage and love.”
But is there an enormous demand for having more kids? Users on Weibo, the Chinese alternative to Twitter, were quick to dismiss the news, with many people complaining about having to raise three children while supporting four senior parents and repaying immense mortgage debt. Another Weibo user summarized how so many other Chinese people appear to feel: “It’s mainly because I feel tired. How can I afford having a child when the pressure in life is so high?”
Still, it is a landmark decision, and experts agree that it was necessary to sustain the economy. Eric Zhu of Bloomberg Economics said in a note:
“China’s new three-child policy is a step in the right direction but it’s not enough to head off an inevitable demographic drag on the economy. Other steps, including birth- and parenting-friendly policies and an increase in the pension age, are needed as quickly as possible if China stands a chance of slowing a looming decline in its workforce and crunch from an aging population.”
So, does the substantial change in population planning come down to economics?
The Economics Behind the New Policy
China is suffering one of the most intense labor shortages since becoming an economic powerhouse. According to the Ministry of Human Resources and Social Security, companies have a challenging time hiring workers, from sanitation to security to manufacturing. The government confirmed that the number of open positions for occupations climbed to 1.418 million in the fourth quarter of 2020, up from 1.316 million in the previous quarter. Plus, the number of job seekers declined during the October-December period.
The number of people aged between 15 and 59 slipped below 900 million to roughly 63% of the total population. This is down 7% from a decade earlier. Estimates suggest that China’s labor force could peak in the next couple of years and then proceed to shrink by approximately 5% by 2030. This would spell trouble for President Xi, who has outlined ambitious and bold economic plans to bolster the gross domestic product by 2035.
The Politburo promised that it would soon introduce delays to retirement ages to keep people in the workforce for a little longer.
It is unclear if these measures will be enough to either encourage fertility or resolve China’s labor crisis. Many experts concur that this policy transition is beneficial to wealthy couples, but it would not push middle-class and low-income couples to produce children amid rising living costs. Moreover, businesses have been responding to the worker shortage by automating their operations, so even if more of the population has children, it could be a matter of too little, too late.
Citigroup analysts call this “a great demographic unknown” that could escalate an enormous financial burden on both the government and the young generation.
China’s Fatal Conceit
Once again, the deteriorating situation in China is an exhibit of the fatal conceit of the statists. As legendary economist Friedrich Hayek wrote, “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” From the rising cost of child-rearing to the attack on individual liberties, President Xi and his merry band of communists further prove that unbridled statism and a paucity of intellectual diversity are dangerous concoctions for even one of the wealthiest nations on the planet.
Read more from Andrew Moran.