From control to incentives: the evolution of demographic policies in China

In many parts of the world, a trend is towards demo­graph­ic decline is occur­ring with China being the most dra­mat­ic. Cur­rently the second most pop­u­lous coun­try in the world, it will exper­i­ence the sharpest decline in pop­u­la­tion in abso­lute terms, los­ing 204 mil­lion inhab­it­ants by 2054. How is Beijing pre­par­ing for such a demo­graph­ic shift?

Pau­line Rossi. After the Great Fam­ine of 1958–1961, the author­it­ies feared a pop­u­la­tion explo­sion, which they saw as syn­onym­ous with an explo­sion of poverty in the 1960s. To avoid this scen­ario, policies pro­mot­ing late mar­riage and then birth quotas were imposed on the entire pop­u­la­tion. The lim­it of two chil­dren per house­hold was reduced to one child in the 1980s.

Meas­ures to enforce com­pli­ance with the quotas were drastic: the pos­sib­il­ity of dis­missal from work, the intro­duc­tion of forced abor­tions, and oth­er ser­i­ous human rights viol­a­tions. These coer­cive meas­ures, coupled with strong eco­nom­ic devel­op­ment, led to a rap­id demo­graph­ic transition.

Today, China, along­side Italy, Spain and the Repub­lic of Korea, is part of a group of coun­tries where fer­til­ity is clas­si­fied as ‘ultra-low’, with less than 1.4 births per woman. In 2024, for the first time, Beijing will see a decline in its pop­u­la­tion, fall­ing from 1.413 bil­lion in 2021 to 1.408 bil­lion three years later. The decline will not stop there. Accord­ing to United Nations estim­ates, the pop­u­la­tion could fall below the sym­bol­ic threshold of one bil­lion by 2070¹.  Finally, while demo­graph­ic estim­ates become uncer­tain in the long term, some pre­dict that by the end of the cen­tury, China is expec­ted to lose more than half of its cur­rent pop­u­la­tion, reach­ing 638 mil­lion inhab­it­ants, and thus return to the demo­graph­ic weight of the late 1950s.

Today, Chin­a’s prosper­ity relies heav­ily on its indus­tries, which require a large labour pool to oper­ate at full capa­city. The pre­dicted decline and age­ing of the pop­u­la­tion will auto­mat­ic­ally reduce the num­ber of workers.

Like Japan and South Korea, two neigh­bour­ing powers exper­i­en­cing the same situ­ation, the author­it­ies are focus­ing on robot­isa­tion and auto­ma­tion in industry to lim­it the impact of labour short­ages. China will fol­low suit. Open­ing up to labour migra­tion does not seem to be on the agenda, and the needs will be such that, unlike its two Asi­an neigh­bours, this option will not be enough for China.

The most press­ing mat­ter, both eco­nom­ic­ally and socially, remains the issue of fin­an­cing pen­sions and health­care for the eld­erly. Mir­ror­ing the exper­i­ence of soci­et­ies in Europe, in 2024 the Chinese Com­mun­ist Party (CCP) called for the retire­ment age to be raised: from 60 to 63 for men; from 50 to 55 for women in manu­al labour; and from 55 to 58 for those employed in offices. A second res­ol­u­tion will increase the min­im­um num­ber of years worked before receiv­ing a state pen­sion from 15 to 20 years start­ing in 2030. These meas­ures have sparked heated debate with­in society.

It should be remembered that a large part of the pop­u­la­tion depends on the inform­al sec­tor and does not receive a pen­sion. For oth­ers, the low level of social pro­tec­tion offered means that they can­not give up all paid work. Finally, rur­al migrants work­ing in cit­ies without per­mis­sion do not bene­fit from it either.

Aware of these issues since 2015, Beijing has taken action and decided to abol­ish quotas. Women were allowed to have two chil­dren, and then three chil­dren from 2021 onwards. How­ever, the expec­ted baby boom nev­er materialised.

Con­di­tioned by the one-child policy for sev­er­al dec­ades, fam­il­ies have developed a col­lect­ive habit of devot­ing a con­sid­er­able por­tion of their income to the suc­cess of their only child, provid­ing them with the best pos­sible edu­ca­tion to achieve excel­lence. The author­it­ies have attemp­ted to lim­it house­hold spend­ing by ban­ning private tutor­ing, but a black mar­ket for home­work help has developed.

To bring about pro­found changes in fer­til­ity decisions, a series of more incent­ive-based meas­ures have been adop­ted, includ­ing fam­ily allow­ances and improve­ments to mater­nity leave. More intrus­ively, state ser­vices are now respons­ible for con­tact­ing women of child­bear­ing age to encour­age them to have children.

China presents itself as a major power in the eyes of the world, a nar­rat­ive sup­por­ted by its status as the most pop­u­lous coun­try. Los­ing this title to India is, at least sym­bol­ic­ally, bad news.

How­ever, there have long been two schools of thought with­in the party. Opin­ions are divided between those who pri­or­it­ise improv­ing liv­ing con­di­tions and those who defend the import­ance of hav­ing a large pop­u­la­tion. In Malthu­s­i­an logic, these two object­ives are con­sidered ant­ag­on­ist­ic. The chal­lenges asso­ci­ated with age­ing are now call­ing this logic into ques­tion: demo­graph­ic decline is now per­ceived as a threat to both eco­nom­ic prosper­ity and polit­ic­al power.

Interview by Alicia Piveteau