In China, the widespread practice of having only one child has long been mandated not by choice, but by law. For decades, this unpopular and restrictive policy––one of the most controversial among the ruling Communist Party’s authoritarian social controls––has been practically synonymous with China. (For related reading, see: Investing In China.)

It wasn’t until the 1970s that the government began to intervene in family planning. After the disastrous 1962 famine, caused by a population boom that outpaced its food supply, Chinese government propaganda urged families to postpone and limit childbearing. This cultural campaign proved wildly successful: from 1970 to 1976, population growth fell by 50%.

China’s one-child policy was codified in 1979 and loopholes soon followed. Human fertility has always proven difficult for even the most aggressive government policy to wholly control, and couples found creative (and sometimes expensive) ways around the policy, from paying hefty fines for additional children to giving birth abroad.

Currently, the fertility rate in China remains low compared to worldwide averages: about 1.5 live births per woman. Surprisingly, that figure still clocks in higher than the birth rates of several other industrialized countries in Asia, including Japan, Taiwan and South Korea.

Reform on the Way

But all that could change, as the nation’s leadership enacts far-ranging social and economic reforms it announced in November 2013, including the potentially game-changing loosening of the one-child policy. That has demographers and sociologists speculating on just what could happen to the structure of Chinese society and also growth rate of its population, which currently stand at over 1.35 billion.

One possible result is a Chinese baby boom, as some 15-20 million Chinese couples in which one partner has no sibling could receive the go-ahead to have more than one kid—and happily comply. (For related reading, see: Why This Investment Will Remain A Boomer's Best Friend.)

Don’t think Beijing hasn’t weighed that possibility; China’s National Health and Family Planning Commission report that public services would face potentially dire challenges if a surge in population of that scale became a reality. That’s a lot of mouths to feed, educate and provide healthcare for just as China's economic growth slows..

Chinese officials believe that liberalizing the one-child policy, along with encouraging more private participation in finance, fostering more market competition and land reforms for farmers, will help transform the nation’s economy and help it transition from the fast-growth course it has been on.

Will It Work?

Of course, such efforts to manage human behavior often have unintended, unforeseen consequences, even when well-executed. Critics are already saying that easing—rather than abandoning outright—the one-child policy shows ambivalence on the part of Beijing. Also, though the new regulations apply countrywide, China’s separate province-level administrations will be responsible for implementation.

But what if a baby boom never comes, as Chinese officials seem to be counting on?

Despite more tolerant family planning laws, the Chinese government explicitly hopes to avoid a dramatic increase in the birth rate. One source of resistance to more sweeping changes may lie in the state-run family planning commission. While the once separate agency now operates under the Health Ministry, it still employs a staggering number of workers in its ranks: more than half a million full-time staff, and another 6 million part-timers.

One Child Now the Norm

But what such projections, demographer caveats and entrenched interests fail to reveal is a dramatic cultural shift among Chinese families during the past four decades: the concept of the ideal family has gradually evolved to accommodate the one-child rule. Population experts report that attitudes about family size have been profoundly shaped by the current norm of small families.

For evidence, take the fact that couples who were exempt from the old one-child policy often choose not to take advantage of having a second child.

Long-Term Effects?

In fact, few experts predict a spike in population significant enough to cause alarm. More salient, at least demographically, is the rapid aging of Chinese society, social scientists say, as it presents a dilemma that current amendments to the one-child policy fail to adequately address. (For related reading, see: Aging Population Feeds Global Healthcare Demand.)

Many demographers warn that China’s relaxation of population controls has been dangerously slow to compensate for a dramatically shrinking labor force. United Nations estimates predict that China will lose 67 million workers by 2030.

According to comments made to Chinese state-run news media by leaders at the National Health and Family Planning Commission, the birth rate––­even with a slight increase over the next several years––will simply not compensate for the loss of workers.

A Generation of Bachelors

One unintended consequence of the one-child policy can’t be corrected by policy reform. That is a gender imbalance in Chinese society due to cultural preference that has resulted in sex-selective abortion. Demographers figure that more than 24 million Chinese men will be unable to find a wife. That reality will become more acute by the end of the decade, they say, and have a profound effect on Chinese society.

The Bottom Line

Despite more relaxed population control brought about by recent policy reform, a potential baby boom in China is unlikely. While the birth rate is predicted to increase, issues of labor force deficits and a gender-imbalanced population could do more to shape Chinese society in coming decades.

Related Articles
  1. Personal Finance

    The Financial Factors Behind Population Decline

    Here's a look at American cities that have seen drastic population decline in the last few years and the financial reasons why people are moving out.
  2. Economics

    How Negative Demographics Can Help The Economy

    The obese, smokers and gamblers get a bad rap for burdening society. But could these groups really be stimulating the economy?
  3. Investing News

    Market Outlook: No Bottom Until 2017?

    These investing pros are bearish on the market in 2016. Will there be a bottom in early 2017?
  4. Investing News

    What Does the Fire Monkey Mean for Your Portfolio?

    The Chinese new year this year corresponds to the monkey, a quick-witted, playful, tricky figure that means well but has a penchant for causing trouble.
  5. Investing

    How To Make Sure Your Healthcare Costs Do Not Ruin Your Retirement

    The best proactive plan of action for a stable retirement is to understand medical costs, plan ahead, invest properly, and consider supplemental insurance.
  6. Personal Finance

    Zika Virus: Latest Advice on Staying Safe

    Zika has hit the U.S. Here’s a quick review of what’s known about the virus, how it spreads, who’s at highest risk and how to avoid it.
  7. Economics

    Negative Interest Rate Policy (NIRP)

    A negative interest rate policy is an unconventional monetary policy tool in which nominal target interest rates are set below zero.
  8. Investing News

    Building a Case for the Bulls: 3 Opinions

    These three big names are bullish on the economy. Are there good times ahead?
  9. Investing News

    Stryker Corporation: A Strong Capital Position

    A discussion on business operations, financials, valuation and growth trends for Stryker Corporation.
  10. Investing News

    Brazil's Latest Export To China: Soccer Players

    Why are Brazilian soccer players moving to China?
RELATED FAQS
  1. What's the difference between microeconomics and macroeconomics?

    Microeconomics is generally the study of individuals and business decisions, macroeconomics looks at higher up country and ... Read Full Answer >>
  2. Does dental insurance cover implants?

    Dental implants have become a widely used procedure in dentistry. Despite their popularity, however, they tend to not be ... Read Full Answer >>
  3. Does dental insurance cover dentures?

    Most full dental insurance policies include some restorative coverage, usually meaning that up to 50% of the cost of dentures ... Read Full Answer >>
  4. Can CareCredit be used for family members?

    CareCredit has become a widely used option when it comes to paying for medical procedures, primarily procedures not typically ... Read Full Answer >>
  5. Can a Flexible Spending Account (FSA) be used for dental?

    Flexible Spending Accounts (FSAs) can be used to pay for dental expenses including deductibles and co-payments with pretax ... Read Full Answer >>
  6. Does dental insurance cover braces?

    Most regular dental plans cover little to none of the costs of braces. The primary focus of regular dental plans is prevention ... Read Full Answer >>
Hot Definitions
  1. Discouraged Worker

    A person who is eligible for employment and is able to work, but is currently unemployed and has not attempted to find employment ...
  2. Ponzimonium

    After Bernard Madoff's $65 billion Ponzi scheme was revealed, many new (smaller-scale) Ponzi schemers became exposed. Ponzimonium ...
  3. Quarterly Earnings Report

    A quarterly filing made by public companies to report their performance. Included in earnings reports are items such as net ...
  4. Dark Pool Liquidity

    The trading volume created by institutional orders that are unavailable to the public. The bulk of dark pool liquidity is ...
  5. Godfather Offer

    An irrefutable takeover offer made to a target company by an acquiring company. Typically, the acquisition price's premium ...
Trading Center