It is well known that China has long faced â€˜over-population’ and that the government has instituted policies to curb population growth; the most famous of which has been the â€˜one-child’ rule instituted in 1979. While this policy has accomplished its specific purpose of lowering the current population by an estimated 400 million people, it has also brought many unforeseen complications. China is now faced with an aging population and an unbalanced gender ratio â€“ problems which have serious long-term economic and social implications.
The negative effects of an aging population will be two-fold – First, as the workforce shrinks due to retirement, economic growth will be curbed. Secondly, the growth in China’s dependency ratio (the # of people too unable to work/# of people of working age) could cripple China’s (already limited) social service programs.
Many economists attribute China’s unmatched population growth to its seemingly limitless supply of labor. As the Chinese workforce ages, it will be increasingly difficult for China to sustain the level of economic growth that it is currently achieving; growth tends to slow as a country’s population ages
Currently, only city dwellers are covered under China’s pension laws. Meanwhile, rural elderly must depend on children for support, it’s one of the reasons that these families are allowed to have more than one child. It is estimated that by 2050 the dependency ratio in China will be .70; this means every 10 Chinese workers will have to support 7 people who cannot work.
Because most Chinese families, especially in rural areas, see females as liabilities â€“ many are aborted before birth. Government statistics show that currently, there are 117 boys born for every 100 girls in China (well above average for industrialized nations.) Obviously, this is going to make it harder for men to find women to marry as time moves on. The frustration that this causes could lead to great civil unrest; it could also lead to population migration, as men feel the need to find marriageable females in other cities or countries.
China has only recently taken notice of the problems and begun to institute change; however, the government refuses to scrap the â€˜one-child’ program. Even if it does ease the policy, it would not have much affect, as children can be too large a burden for the typical Chinese family to handle. Some of the fixes that China is implementing include offering subsidies to families that have female offspring, offering subsidies to rural families that have more than one child, educating the population about the benefits of having female children, and becoming aggressive in seeking returns on pension fund management.
China is facing quite a paradox â€“ the population growth that drives their economic growth is also overpopulating their cities. They cannot avoid this problem, their population has to peak at some point and their economic growth (at least that attributed to labor) will slow. They can counter this effect by focusing on technology and capital expenditures that will provide an infrastructure for growth that will not rely so heavily on labor. As far as the gender ratio is concerned, the government must convince the citizenry that females are not a liability especially as the Chinese economy continues to modernize. Instilling faith that the subsidies will be consistent and reliable for the long-term will also help the Chinese people change their perception.
Submitted By Felipe Hernandez