What's Making the Chinese Nervous?

In the late 1970s and early 1980s, the Chinese had a problem. Too many kids.

The governrnment recognized that having so many rug rats running around would sap the country of resources that could be used for economic growth.

So officials did what they had always done: passed a law.

The new regulation, introduced in 1979, allowed only one child per couple with few exceptions. If you broke this law, you were subject to fines and the additional children were not allowed to be registered for school or social benefits.

The one-child policy saved China from an additional 350 million births. But it also created a mismatch between the sexes. Parents preferred boys. And the policy drained the country of a future workforce that could support an aging, bulging population.

So, once again, governrnment officials did what they always do. A new law, passed in 2015, allowed couples to have two children.

Officials expected births to shoot higher and reach 25 million per year. Outside experts were less optimistic and forecast births would jump to 20 million per year.

Both were wrong.

Just under 18 million children were bornrn in China in 2016. That number dropped to 17.2 million last year.

The number of live births per 1,000 people dropped from 23 in 1987 to 12 for most of the 2000s. Over the last two years it has inched up to 13.

It appears that even with the governrnment’s position, young couples aren’t terribly excited about expanding the family.

And why would they be?

By denying families the right to have more than one child for 30 years, the governrnment cemented a generation of only children.

As these little princes and princesses get married, they face the daunting challenge of supporting themselves and their four aging parents, plus any children they might have. Bringing one child into the world might be great for the ego and keeping the family name going, but more than that and they run the risk of financial strain.

Chinese social benefits aren’t exactly generous. To ensure your child’s success, the toddler must be sent to private schools and provided extra tutoring. And then there’s university, as well as making sure he or she is successful enough to attract a mate.

All of this makes Chinese bureaucrats nervous. The nation’s labor force has shrunk since 2012 and is expected to decline by more than 20% over the next 30 years as the aging group retires. That will leave hundreds of millions of old Chinese wondering who will pay the taxes that will support them in the years to come.

To make matters worse, no governrnment has been able to solve this puzzle. From Singapore to South Korea, governrnments have tried to encourage couples to form families and have children but to no avail. Japan is among the worst cases, but other nations aren’t far behind, including Germany.

All of China’s grandiose plans, including its One Belt, One Road Initiative, won’t mean much if the country can’t find a way to stabilize its population and care for its own people.

This is probably one of the biggest examples of an unintended consequence as a result of governrnment policy. Which brings to mind the old adage: Be careful what you wish for.