People walk past the headquarters of the People’s Bank of China (PBOC), the central bank, in Beijing, China on September 28, 2018.
Jason Lee | Reuters
BEIJING – China may be one step closer to abandoning its controversial birth control policy.
The central bank released a paper late Wednesday proposing that the country lift limits on how many children people can have, suggesting that China “should fully liberalize and encourage childbirth.”
As China’s population began to age, Chinese authorities began several years ago to reverse the decades-old ‘one-child policy’ and allow people to have two children. But births continued to decline and fell by 15% in 2020 in a fourth consecutive year of decline.
“In order to achieve the long-term goals in 2035, China must fully liberalize and encourage childbirth, and (possibly) eliminate problems (facing women) during pregnancy, childbirth, and kindergartens and school enrollment in every way possible,” the central bank said. researchers wrote the English summary on an assignment.
The 22-page document was dated March 26 and shared publicly on Wednesday.
The newspaper states that the authors’ views do not represent the central bank. However, the call to drop restrictions on births is the latest high-level discussion of how to address China’s aging population problems.
Compete with India and USA
One of China’s biggest concerns is the impact that these demographic changes may have on economic development.
In two dedicated sections of the article, researchers from the People’s Bank of China set out how these demographic issues put China at an economic disadvantage for the US and India.
“If my country has narrowed the gap with the US over the last 40 years by relying on cheap labor and the bonus of a large population, what can it rely on in the next thirty years? It’s worth thinking about, “write the authors. in Chinese, according to a CNBC translation.
They noted how the US is benefiting from immigration, even as China’s population grows older. Meanwhile, India’s population and labor force will soon surpass those of China, they said.
From 2019 to 2050, the Chinese population will decrease by 2.2%, while the US will increase by 15%, the newspaper said, referring to the UN estimates.
The authors added that the percentage of China’s workforce is declining and that it will lose its advantage over that of the US in the next few decades.
In 2019, China’s workforce was 5.4 percentage points higher than the US, but by 2050, staff in China will be 1.3 percentage points smaller than the US.
China’s aging population
In a plan launched in March for economic development for the next five years and beyond, Beijing said the effects of the aging population were one of its priorities. However, they stopped removing a ban on Chinese families having more than two children.
If there is a slight hesitation, (we) will miss the precious opportunity for birth policy to respond to the demographic transition and repeat the mistake of developed countries.
People’s Bank of China working document
Educational and technological advances are insufficient to counteract the decline in population, and China needs to introduce restrictions on births, the authors write.
“If there is a slight hesitation, (we) will miss the precious opportunity for birth policy to respond to the demographic transition and repeat the mistake of developed countries.”
The article generally discussed how China’s aging problem is worse than that of developed countries. In particular, the authors noted that developed countries with an aging population problem tend to be richer with a per capita GDP of at least $ 2,000, while China is half of $ 1,000.
And once the older part of the population starts selling property, shares and bonds to finance their retirement, the ratio will be close to that of a workforce buying those assets, which could lead to increased pressure on prices, the newspaper said. .
Chinese authorities will announce results of a once-a-decade census later this month.