The Unintended Consequences of China’s Revised One-Child Policy

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Andy Tay Kah Ping's picture

Introduction

China introduced its one-child policy in 1979 in its attempt to control the exploding population. While this draconian policy has been blamed for gender skews and violations of human rights, it has undoubtedly helped China to rise to its present status as an economic power. Having one child per family ensures that parents devote their resources to fully groom their children. It also helps to control the booming population and avoids the Malthusian catastrophe. However, with ageing population, slowing economic growth and perhaps growing nationalistic agendas, the Chinese Communist Party (CCP) announced its revised population policy after its third Plenum meeting. Under the new policy, couples in which one of the partners comes from a single child family are allowed to have more than one child. Economists and human rights advocates welcome the changes but I argue that the potential labor surplus, inadequacy of social system to satisfy the growing population and Chinese leaders’ manipulation of the policy to gather support for nationalistic ambitions call for less optimism.

Labor Surplus

I contend that labor surplus due to relaxation of one-child policy may suppress wages and perpetuate harsh working conditions in China. The additional labor may also create global labor disequilibrium. Two possible scenarios can happen: businesses moving to China to capitalize on cheap labor and Chinese labor moving to work overseas. In either case, undesirable consequences such as erection of protectionist and xenophobic policies may result.

With an aging demographic, the burden on Chinese taxpayers is expected to increase 2.5 folds by 2030. Fertility rates in major cities such as Guangzhou and Beijing are also one of the lowest globally [1]. It therefore makes sense to boost the size of the labor force to generate more tax revenues, albeit that the additional manpower is able to find employment. Unfortunately, China’s slowing GDP growth hints at a less optimistic picture that job creation may fall behind labor generation. This picture is dangerous both nationally and globally.

A surplus of manpower can exacerbate the existing deplorable working conditions in China, fuelling unrest as seen in the Foxconn incident [2]. A young and angry population may also generate political opposition to the CCP similar to the 2011 Egyptian revolution, disturbing peace. In the first scenario where businesses move their manufacturing bases to China to capitalize on the low wages, this same tragic story may be replicated in other developing countries as young people are unable to find employment in their home countries. This is likely to cause unhappiness and also protectionist policies. In the second scenario where the additional labor from China are able to find employment overseas, it may encourage the implementation of xenophobic migration policy as countries try to protect an influx of cheap labor. Therefore, a surplus of labor resulting from a relaxation of the one-child policy in China may create labor unhappiness nationally and internationally.

Poorer Quality of Life

The revised population policy may lower quality of life in China as people compete for scarce resources. Additionally, manufacturers may compromise product quality as they accelerate their production processes to satisfy the appetite for goods in the national and global markets.

With a larger population of taxpayers, the Chinese government can utilize the revenues to revamp its social system in vital areas such as healthcare and education. The revenues can also help to strengthen policing efforts on amoral food and service providers. However, it is expected that the new policy is unlikely to boost reproduction rates greatly in urban cities where tax collection system is strongly in place [3]. This means that the disproportionate manpower increase in different parts of China may not lead to a substantial increase in tax revenue to improve the social system and quality of life. This is because tax collection system in rural China is less established and labor mobility is also restricted by the “hukou” system.

A larger population necessarily calls for more resources such as food, water and goods which China may not be able to produce or purchase sufficiently. Furthermore, as China is still a developing nation with serious income inequality problems, it means that more Chinese are expected to be malnourished and unable to advance the social ladder. Globally, people should be wary of the wave of tainted products entering markets as Chinese manufacturers try to accelerate their production cycles by taking shortcuts. Goods such as melamine tainted dairy products [4] and meat products made of animal waste may enter the markets, lowering quality of life in the world. This is especially worrying as China is the world production hub. Hence national and international attention should be paid to China’s revised policy to avoid a decline in living standards.

Dangerous Nationalism

A growing population can generate greater urgency to look for resources beyond the existing national boundaries. It can also support the CCP leaders with stronger reasons to engage in direct confrontations with regional countries which it has existing disputes. Most importantly, the Chinese government may channel their people’s attention to nationalistic agendas if they fail to manage issues such as labor surplus and poorer quality of life that arise due to larger population. This does not bode well for global security.

China has long engaged in rhetorical disputes with regional countries such as Japan and the Philippines over the ownership of islands [5]. However, its actions in recent years such as the extension of air defense zone [6] go beyond theatrical rhetoric and may be interpreted as a sign for future tension in the South China Sea. The intensity of the disputes may heighten as China needs to find more resources to sustain economic growth and feed its growing population.

History has shown us that nationalism is a clever strategy to divert the people’s attention away from poor national leadership. Chinese nationalistic ambitions have already motivated greater defense budgets in Japan and South Korea and protests by Filipinos over China’s claim on Scarborough Shoal. Global tensions and insecurity are bound to happen if the CCP gains the support of its people to engage in direct confrontation with regional nations. Dangerous nationalism may occur if the Chinese people are manipulated by their leaders. The undesired consequences of the revised one-child policy may therefore threaten regional and global peace.

Conclusion

The relaxation of one-child policy may not be a free choice of the Chinese leaders after all as China faces the conundrum of a dwindling labor force, and the urgency to revamp its social system and to drive its growing economy. The revised policy may create labor unhappiness due to labor surplus and reduce quality of life as people compete for scarce resources. It can also incentivize global leaders to tap on nationalistic ambitions to stay in powers. Perhaps the stage-wise implementation of the revised policy in stages shows that the CCP leaders too are aware of the unintended consequences of their decisions. While the described consequences of the revised one-child policy are not likely to be immediate and full-blown, leaders worldwide should take note of them and avoid being dragged into a preventable argument over global labor policies and competition for resources.

 

References: 

References

1. Economist. Smashing a relic. 2013 [cited 2014 1-2-2014]; Available from: http://www.economist.com/blogs/analects/2013/11/one-child-policy.

2. Moore, M. 'Mass suicide' protest at Apple manufacturer Foxconn factory. 2012 [cited 2014 1-1-2014]; Available from: http://www.telegraph.co.uk/news/worldnews/asia/china/9006988/Mass-suicid....

3. Chang, G. China's One-Child Change Doesn't Avert Demographic Collapse. 2013 [cited 2014 1-1-2014]; Available from: http://www.forbes.com/sites/gordonchang/2013/11/17/chinas-one-child-chan....

4. BBC. Timeline: China milk scandal. 2010 [cited 2014 1-1-2014]; Available from: http://news.bbc.co.uk/2/hi/7720404.stm.

5. Hookway, J. Tensions Flare Over Disputed Asian Sea. 2011 [cited 2014 1-1-2014]; Available from: http://online.wsj.com/news/articles/SB1000142405270230425930457637520372....

6. Xinhua. Chinese stands firm on air defense zone. 2013 [cited 2014 1-1-2014]; Available from: http://news.xinhuanet.com/english/china/2013-12/12/c_132963255.htm.