China's population policy

By John Wong, For The Straits Times

China's one-child policy has outlived its usefulness and needs to be changed before it has a further negative impact on economic growth.

  

FIRST introduced in 1979 as one of its ''core state policies'' in the reform period, China''s family planning policy (jihua shengyu zhengce), commonly known as the one-child policy, has since been very controversial. This is because it restricts most, if not all, urban couples to only one child (boy or girl), though many exceptions have been variously applied in rural areas and for ethnic minorities. It is probably the world''s harshest population control programme affecting the largest number of people - about 60 per cent of China''s population.

With the policy having outlived its usefulness, President Xi Jinping now appears set to change it. But China will have to live with some of the unintended consequences for some time.

From the start, the government had to introduce draconian measures to ensure its implementation. The policy caused a lot of suffering (such as forced abortions), along with a number of negative social consequences, including female infanticide and a serious gender imbalance.

The government has justified the huge social cost by claiming that the policy prevented 250 million births between 1980 and 2000 or 400 million births between 1979 and 2011. This has, in turn, alleviated many economic, social and environmental problems that would have accompanied a higher population growth.

Mao and Malthus

ADVOCATING family planning was traditionally seen as opposed to orthodox Marxist ideology.

Back in 1957, when economist Ma Yinchu (then president of Peking University) proposed a mild form of family planning, Mao came down hard on him for being a ''Neo-Malthusian''. To Mao, every additional mouth meant an additional pair of hands. China''s population was then around 650 million, but growing rapidly at over 2 per cent a year. China thus missed its first chance of reining in population growth. 

By the time Deng Xiaoping was about to embark on his economic reform in 1979, China''s total population had swelled to nearly a billion. It was growing at 1.5 per cent a year, with a total fertility rate (TFR, the average number of children per woman) at around 2.6.

State councillor Song Jian, a rocket scientist by profession, then put forth his ''Theory of Population Control'' to Deng. According to Mr Song, China''s population would reach 1.7 billion before the year 2000 by simple extrapolation, and possibly 2.7 billion in the following 50 years.

THAT was a staggering number to Deng and his economic planner Chen Yun. Both still had fresh memories of how Mao had struggled to feed China''s teeming millions when its population was then well below a billion. Deng immediately realised how this potential ''population time bomb'' would jeopardise his economic reform efforts. Clearly, any reform benefits would quickly be eaten up by population growth. China would risk running into what development economists call the ''low-level equilibrium trap''.

Furthermore, population growth is not just about its exponential rate of increase (what the Malthusians call ''geometric progression''). It is also about the least understood problem of ''hidden momentum'': the time needed for a baby girl to grow up to produce another baby girl. In other words, any demographic change requires at least one generation to produce the desired results.

It thus became clear to Deng and Chen that controlling population growth was crucial for the success of his economic reforms. The only way to achieve the desired level of population growth level within the required time frame was therefore to beat the ''time dynamics'' by squeezing the fertility rate well below its natural replacement level. And this would have to start immediately.

Implementation

IN 1980, Chen thus declared: ''Our present priority is to advocate for one child birth per couple''. Such is the origin of the one-child policy, with TFR at 1. The National Population Family Planning Commission (NPFPC) was soon set up, which would subsequently spawn a huge bureaucracy of over 500,000 staff all over China. Suffice it to say that the policy was not a political or ideological product; but rather, a very bold and pragmatic pro-reform and pro-growth social experiment based on ''hard numbers''.

China''s total population by last year had grown to 1.35 billion from 975 million in 1979 - a 38 per cent or so rise in three decades. In the same period, China''s total nominal gross domestic product (GDP) increased from 410 billion yuan to a hefty 52 trillion yuan, or a 126-fold increase. Its per-capita GDP also increased 92 times. Viewed from the angle of reform and economic growth, the policy has indeed achieved spectacular success. In fact, the policy has been too successful by overshooting its original targets. Since the early 1990s, China''s TFR has fallen below the replacement level of 2.1.

Successful economic development everywhere is the best contraceptive, as it is bound to bring about a sharp decline of TFR. The official TFR from the NPFPC (which has become an interest group lobbying for a continuation of this policy) was for years put at 1.8. More realistic independent estimates for current TFR are around 1.5 to 1.6. For Beijing and Shanghai, the TFR has dropped to only 0.7, the lowest in the world.

Social dynamics

DEMOGRAPHY is much more than just counting heads. Mr Song Jian had no doubt got the numbers right. But, along with many Chinese leaders in those days - all of whom have similar science and technology backgrounds - Mr Song was oblivious, if not ignorant, of the many underlying socio- economic forces associated with rapid demographic transition. As population growth declines, its structure also changes. Once its TFR falls below the replacement level, the population starts decreasing in size and then growing older. China''s population is expected to peak in about 10 years at 1.45 billion. Last year, the share of population over 65 reached 9.4 per cent, compared to only 4.5 per cent in 1979. More seriously in 2012, the age-related labour force started to shrink for the first time. This means that China has started to lose its comparative advantage in labour-intensive manufacturing activities.

All in all, the one-child policy has long outlived itself, with socio- economic costs increasingly out-weighing the initial benefits. Though the policy has been relaxed over the years, Mr Xi is set to change the policy further or even abolish it altogether.

With continuing economic development and urbanisation, the decision of a Chinese couple today to have children will increasingly depend on the family income, the cost of bringing up children, opportunity costs in terms of leisure and the wife''s career, and so on. Such is the microeconomic theory of fertility behaviour associated with the Chicago School.

Singapore is the case in point. All the Government''s pro-natal efforts, including handing out generous incentives and benefits to women, have not succeeded in reversing the declining TFR trend.

Accordingly, China''s new population policy, in whatever form, might just come too late. All demographic factors are long-term in nature. At present, China has not yet faced labour shortages. But the overall adverse effect of a declining population growth will slowly set in. The long-term challenge for China is how to get rich before getting old.

The writer is a professorial fellow at the East Asian Institute, National University of Singapore.

 The Straits Times  Published on Nov 13, 2013

Our home: Think big, plan long term

By Liu Thai Ker

THE current debate on population consists of two key aspects.

On the one hand, the Population White Paper touches on issues related to our ageing population, the low birth rate by Singaporeans, the social impact of a high percentage of foreigners and so on.

On the other hand, there is a complementary paper about achieving quality environment for Singapore at an increased population of up to 6.9 million by 2030. The latter involves the hardware aspect of our nation building - the construction of buildings, roads and other infrastructure.

Let us focus on the hardware issue. In our land-scarce island-nation, where there is almost zero tolerance for mistakes, we have to look at the issues rationally and calmly, with foresight, skill and brave hearts. We have to look past symptoms and identify causes. Only then can we find appropriate solutions with minimum mistakes. The hardware core issues in the current debate on population size should be about limited land, more people, higher density, quality environment as well as the floor area standard per person for all his or her activity needs.

There are a few factors to consider.

First, it is easier to achieve quality environment with a relatively low population density, and increasingly more difficult to achieve quality environment with increasing density. But higher density does not necessarily equal bad environment; conversely, low density does not automatically equal good environment. The key is whether it is well planned. As a reminder, in 1960, we had 1.89 million people. To date, we have 5.3 million - an increase of more than 250 per cent. Despite the increase, and the fact that we are among the densest cities in the world, we have managed to be consistently ranked among the world's most liveable cities.

The message here is, given clear vision, determination and skills, we can manage high density as well as good environment. In other words, we can have our cake and eat it too.

Second, very few city governments are able to stop population growth by sheer decree. This is especially so if the city needs to stay relevant in the global arena. China is unable to stop the population growth of Beijing, Shanghai and Guangzhou. Even small countries in Scandinavia are experiencing population growth, although at a much slower pace than Asian countries and cities. Therefore, in Singapore, we can only try to find ways to slow down, rather than to stop population growth at an arbitrarily fixed growth rate and for a fixed point in time.

Third, we should bravely face the harsh reality that while our land mass - despite further but not unlimited reclamation - is limited, our nation will last for unlimited years. What should we do then to plan for continuous population increase, even at a lower rate, while retaining and even enhancing the hardware of our physical environment? By quality environment at noticeably higher density, I mean that we will still need to continue to retain our open spaces, golf courses, institutions, amenities as well as a range of low, medium, high and even higher density housing and so on.

These are the core hardware issues. Let us not be unduly distracted by the current symptoms such as the present problems of short supply of public housing, rising property prices, congestion on our MRT, and the occasional flooding of our streets. Though irritating, these are not fundamental issues. Given careful monitoring of supply and demand, as well as timely implementation, these matters can be resolved professionally with imagination and technology.

But we should not pin our hopes unduly on technology to solve our fundamental problems. Nor should we be persuaded by temporary feel-good factors such as pretty park designs, iconic buildings or busy shop streets. We want them, of course, but on the solid foundation of successfully achieving quality macro-environment, at higher density that is sustainable for a long time.

Looking ahead, the issue of the future population size of Singapore is complex: on the one hand we want a good environment; on the other hand we must continue to grow economically with an additional labour force, domestic as well as foreign, in order to maintain our hard-earned position in the world. What we have achieved is truly remarkable. Despite our extremely small size, we have managed, over the last 50 years, to earn many and diverse accolades among the world's top cities. This is the position that we must not only try to maintain, but to enhance as well. 

Any alternative to this scenario is to run the risk of becoming marginalised if we stay in our present comfort zone. It is not something we wish to see for the long-term future of our country, and for our children and grandchildren.

We have attained this highly enviable status not only by foresight, determination, consummate skill and sheer hard work, but above all, also by looking at our problems and needs squarely in the eye. In many cases we have found solutions that were against the fashionable trends of the time elsewhere in the world.

One good example of this special attribute of ours is our public housing policy. Against all criticism, we resorted to building high-rise, high-density public housing as far back as in 1960. We knew that we had no other choice if we were to break the "Backbone Of Housing Shortage" and achieve the seemingly impossible goal of "Home Ownership For Everyone". Our public housing is now studied by nations all over the world. By 1985, Singapore had become a city with no homeless people, no squatters, no poverty ghettoes, no ethnic enclaves. Not many cities around the world today can make that claim.

We must therefore soldier on to solve our unique problems as we have done many times before.

In summary, we need to look past 6.9 million people and look past 2030. We should tally up how many more buildable sites we have (as big as possible) while retaining our quality environment.

However, while physical planners will play a crucial role in shaping the physical environment, their effort should be complemented by a whole of Government effort. That is, being mindful of our limited land supply, we should try to accommodate population growth, local and foreign, at as slow a pace as possible, towards the distant future.

To achieve this, we need to take an even harder look at our education system to nurture smarter talent to drive an even higher value-added economy at increasingly higher productivity.

In the end, we have quality talent, high-yield economic activities, very slow population increase, manageable population density, and quality environment - not only to provide a good home for citizens but also to attract foreign investment and foreign talents with their families.

The writer is a director of RSP Architects Planners & Engineers.

By Invitation features expert views from opinion leaders in the region and Singapore.

The Straits Times

Published on Feb 13, 2013