A Booming Policy

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  ChinAfrica: Will China face a baby boom after the implementation of the new policy?
  Mu Guangzong: Such possibility is low. Today, most young couples believe the ideal family structure is to have one or two children. Only a few choose to have none or more than two. A recent survey conducted by the National Health and Family Planning Commission shows that 50-60 percent of eligible Chinese couples are willing to have a second child. However, the rate based on willingness is usually higher than the actual birth rate, as people will take into account the financial implications and time constraints of raising a child when they make their decision. It’s easier for them to express willingness than to face the reality of extremely high cost. Based on the situation of the families where both couples are only children [already allowed to have a second child], we could speculate that the birth rate of families, where one or both of the couples are the only children, remains low. Presumably, less than 30 percent of families of one only-child parent will choose to have a second child.
  There are people who want to have more children but cannot afford it, what can help improve the situation?
  Currently, the birth rate in China has fallen to an alarmingly low rate. The new policy focuses on encouraging eligible couples to have another child, indicating a shift from the one emphasizing punishment. As today’s young Chinese would like to provide better conditions for their children, child-raising costs keep rising. Therefore, to ease their concern for a second child, related policies for better social services should be available. So I think that family planning policy reform must integrate loosening restrictions and guidelines on decisions for birth, as well as providing quality childbearing service and maternity care.
  The year 2002 saw a policy adjustment that allowed couples to have a second child if both of them are the only children. Does it suggest China has decided to reform its family planning policy since then?
  As planned in 1980, China’s one-child policy would only work for one generation. So the policy in 2002 is a natural and smooth transition, and we cannot say it showed an intention to reform. But the policy of last year, as an adjustment to the family planning policy, shows that the government begins to give more consideration to enhancing risk-resisting ability of Chinese families. The reform has been going on in a prudent manner, in case of a possible population boom. But I don’t think it’s necessary to be overcautious, because all the birth decisions will not be made during the same period, and furthermore, people can be guided for their reproductive plan. A population boom should not be feared since population volatility is normal.   What impact will the new population policy have on China’s economy?
  It will have a positive impact. First, it will stimulate consumption - the new demand will become the driving force of the growth of the infant product industry. Meanwhile, the newly increased population, as an important source of domestic demand, is a long-term impetus to consumption.
  Another positive impact is on labor supply. After 15 to 20 years, the new generation will become laborers and contribute to economic development. Currently, China is facing a shrinking labor pool. The year 2012 saw a working population (from 15 to 59 years old) decrease 3.45 million, and in 2013, it further decreased by 2.11 million. The population between 15 and 64 year old is estimated to drop from 74.35 percent of the total population in 2010 to 60 percent in 2050. The new policy can, to some extent, make up for the shrinking labor pool.
  With such a large population, how can we coordinate reproductive equality with the sustainable development of the country?
  Every human is unique and precious, and 1.34 billion people are the most important resources in China. To strike a balance, market can play a role. The market mechanism can bring the numerical superiority of population into full play through free and orderly population movements. With the innovative system under reform and opening up, increased population will bring about more demographic dividends, a more reasonable population structure, as well as balanced and sustain- able development. Population growth would bring stress and problems only in a planned economy, while with a sound market economic system and information environment, it will become a driving force.

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