November 12, 2007

DEPRIVING YOURSELF OF THE WEALTH OF NATIONS:

China's Future and Its One-Child Policy (Nicholas Eberstadt, September 2007, AEI)

This essay is excerpted from an address by Mr. Eberstadt at the inaugural World Economic Forum in Dalian, China, on September 7, 2007.

On current trajectories, China's total population is set to commence a prolonged decline around 2030. Between now and 2030, however, China will undergo a population explosion of sorts: a huge increase in its number of senior citizens. Between 2005 and 2030, China's sixty-five-plus age cohort will likely more than double in size, from about 100 million to 235 million or more. Because of the falloff in young people, China's age profile will be "graying" in the decades ahead at a pace almost never before witnessed in human history. China is still a fairly youthful society today--but by 2030, by such metrics as median population age, the country will be "grayer" than the United States in 2030.

By 2030, China's median age may be over forty-one--which is to say, half or more of the nation's population would be above forty-one years of age by that date. Japan--the world's most elderly society now--reached a median age of forty-one just a few years ago, around 2000. But in the year 2000, Japan was far more affluent than even the most sanguine of optimists imagine China might be by 2030--and unlike China, Japan has a national pension system. How will the elderly in China get by in the world they will so soon be facing?

Until now, China's de facto national pension system has been the family--but that social safety net is now unraveling rapidly. Until very recently, thanks to relatively large Chinese families, almost every Chinese woman had given birth to at least one son--and according to the Confucian tradition, it was sons upon whom older parents would rely for their first line of support. Things will be very different in the immediate future. Just two decades from now, thanks to the "success" of the One-Child Policy, roughly a third of China's women entering their sixties will have no living son.

One can see the making of a slow-motion humanitarian tragedy in these numbers, but the withering away of the Chinese family under population control has even more far-reaching implications. To exaggerate only slightly, over the coming generation, we may see 2,500 years of Chinese family tradition come to an end.

Recall that in Beijing, Shanghai, and other parts of China, extreme sub-replacement fertility has already been in effect for over a generation. If this continues for another generation, we will see the emergence of a new norm: a "4-2-1 family" composed of four grandparents, only two children, and just one grandchild. The children in these brave new families will have no brothers or sisters, no uncles or aunts, and no cousins. Their only blood relatives will be their ancestors.

There will be many ramifications from this societal sea change. Here, let me dwell only on what this may portend for economic growth. It is no secret that China is a "low trust society": personal and business transactions still rely heavily upon guanxi, the network of personal relations largely demarcated by family ties. What will provide the "social capital" to undergird commercial and economic development in a future China where "families" are, increasingly, little more than atomized households and isolated individuals?

There is one other handmaiden of the population control program that requires comment: this is the eerie, unnatural, and increasingly extreme imbalance between baby boys and baby girls in China. Ordinarily, the human species observes the birth of about 103 to 105 baby boys for every 100 baby girls--this is a natural and biological regularity. Shortly after the advent of the One-Child Policy, however, China began reporting biologically impossible disparities between boys and girls--and the imbalance has only continued to rise. Today China is reporting 123 baby boys for every 100 girls.

Over the coming generation, those same little boys and girls will grow up to be prospective brides and grooms. One need not be a demographer to see from these numbers the massive imbalance in the "marriage market" facing China in a generation or less. How will China cope with the sudden and very rapid emergence of tens of millions of essentially unmarriageable young men?

All of the problems described here are directly associated with China's population-control program. Even so, some may still wonder: wouldn't ending the one-child norm bring us back to the days of the four- or five-child norms (with a whole new set of attendant problems)? It is unlikely. More importantly, some of China's best demographers also doubt this and have indicated as much in print, albeit cautiously.

Remember, in the absence of coercion, the best predictor of family size is the number of children that parents actually wish to have: that is to say, their desired fertility. Those desires are affected not just by income and education, but by a subtle and complex array of outlooks, attitudes, and expectations. All of these quantities look to have changed dramatically in China since the days of Mao. A scrapping of the restrictive birth control policy would surely ease China's incipient aging crisis, its looming family structure problems, and its worrisome gender imbalances, but it would be most unlikely to bring us back to pre-industrial norms of fertility.

In the final analysis, the wealth of nations in the modern world is not to be found in mines, or forests, or deposits of natural resources. The true wealth of modern countries resides in their people--in human resources. And human beings are rational, calculating actors who seek to improve their own circumstances--not heedless beasts who procreate without thought of the future.

China's people are not a curse--they are a blessing. Trusting them to act in their own self-interest--not least of all, trusting their choices and preferences with respect to their own family size--may very well prove to be the key to whether China succeeds in abolishing poverty and attaining mass affluence in the decades and generations ahead.

Posted by Orrin Judd at November 12, 2007 8:23 AM
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