DOES CHINA NEED TO ABOLISH FAMILY PLANNING POLICY? ANALYSIS OF FAMILY PLANNING POLICY AND TWO-CHILD POLICY

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1 DOES CHINA NEED TO ABOLISH FAMILY PLANNING POLICY? ANALYSIS OF FAMILY PLANNING POLICY AND TWO-CHILD POLICY Yuayua Zhou 1. Jia Uiversity, P.R.Chia; 2. Wuha Uiversity, P.R.Chia Yumi Li 1. Jia Uiversity, P.R.Chia; 2. Wuha Uiversity P.R.Chia Abstract Family-plaig policy i Chia has bee implemeted for more tha 40 years. It has reliably reduced the sie of the populatio, but ievitably it also brought a serious problem of populatio agig. I 2015, Chia itroduced a ew fertility policy Two-child policy, which meas each couple ca have two childre. Will the policy fully cope with the agig of populatio? What detractio effect does it have? Does Chia eed to fully liberate the fertility policy? The article will try to aswer these questios. Keywords: Fertility policy, Total fertility rate, Demographic bous JEL code: J13, J24 Family plaig policy is a populatio policy to directly cotrol the populatio. Implemeted for early 40 years, the policy has effectively cotrolled the populatio ad improved the quality of the populatio. It is a key policy to promote Chia's path of sustaiable developmet ad achieve the strategic goal of moderiatio. Uder the coditio of steady ecoomic growth rate, the lower the populatio growth rate, the higher the level of per capita icome growth. Accordigly, the etet of the improvemet of people's welfare level will be greater, sustaiable ecoomic developmet will be more possible. 1. Itroductio: The Cotributio of Family Plaig Policy to the Reductio of Populatio Sie i Chia The purpose of populatio policy is to itroduce the scale, structure ad distributio of populatio. Objectively speakig, the implemetatio of family plaig policy to effectively

2 cotrol populatio is i the last resort. I a specific historical stage, the policy was implemeted maily by admiistrative meas, with low capital ivestmet, high political costs ad lost of childbearig age wome's physical ad metal health. Family plaig policy creates a demographic bous period of early forty years, durig which Chia has low populatio support rate, high social savigs rate ad youg workig age populatio. I the year of 2005, a NPC Stadig Committee official poited out o Forum o Populatio ad Developmet i the Northwest Area : Sice the implemetatio of family plaig policy i 70s of 20th cetury, the total fertility rate has falle to aroud 1.8. Compared with other coutries ad regios with the same level of ecoomic developmet, Chia's total fertility rate is 1.2 to 1.3 lower. This chage kept 300 millio people from beig bor. < Natioal Populatio Developmet Strategy Research Report > issued by Natioal Populatio ad Family Plaig Commissio i Jauary 11, 2006 idicated that Family plaig has realied the historical trasformatio of populatio reproductio type, from high birth, low mortality, high growth to low birth, low mortality, low growth. Total fertility rate fell from 5.8 i early 1970s to the curret level of 1.8, which below replacemet level. More tha 400 millio people beig kept from bor, si billio world populatio day delayed for 4 years. Results of the sith cesus of populatio i 2010 shows that Chia has icreased by 73 millio 900 thousad people i 10 years compared with the fifth atioal cesus i 2000, growth rate of 5.84%, the average aual growth of 0.57%. The average aual growth rate was 1.07% from year 1990 to Fertility declie led to a declie i populatio depedecy ratio of 1/3, creatig 40 years of demographic divided period for ecoomic developmet. 2. Policy ad Populatio Status: Ecoomic Structure of "Not rich first old" < World populatio report > released by UN Populatio Fud i 2005 shows that each woma gave birth to a average of 2.6 childre aroud the whole world i 2005, developed coutries 1.5 childre while developig coutries 2.8 childre. Chia's total fertility rate (1.3) i 2005 was oly about half of the average level i the world. It s lower tha half of the average level i developig coutries ad lower tha the average level i developed coutries. Accordig to < Chia Statistical Yearbook 2016> published by Natioal Statistics Bureau, total fertility rate of Chiese wome i childbearig age is oly 1.047, lower tha half of the populatio replacemet level (2.1). Formula for birth rate calculatig the age at Z years: f B F () B Z years () F umber of female ew bor ifats at the age of Z years

3 umber of female populatio at the age of f B F () B Z years umber of female ew bor ifats at the age of -+ F () Z years umber of female populatio at the age of -+ Formula for total fertility rate: TFR f Female maimum reproductive age Female miimum reproductive age From aother perspective, together with effectively cotrollig the populatio, family plaig policy gives rise to a uique coutry i which people become old earlier tha rich. Icreasig proportio of workig age populatio declied costatly ad elderly populatio proportio icreased rapidly. Those are the mai features of populatio chage i Chia i recet decades. Data from Natioal Statistics Bureau i Ja shows Chia has a total populatio of 1 billio 360 millio, 14.9% of which are over 60 years old ad beig epected to reach 25% of the total populatio i The tred is irreversible. Predictio results from the Natioal Agig Office show that Chia will have a average icrease of 5 millio 960 thousad elderly populatio aually from 2005 to By the year 2030, elderly populatio will reach 351 millio. The results of the research group Research o the Balace of Urba Pesio Icome ad Epediture Uder the Backgroud of Populatio Agig of Liaoig Uiversity show if i accordace with the eistig policy uchaged, deficit of social poolig pesio balace will really highlight after The deficit will reach the peak durig , ewly icreased 100 billio RMB per year. To cope with the fiacial pressure of the 2030 populatio agig peak, strategic reserve fuds eed to be at least billio RMB. It is ecessary for the govermet to adjust the family plaig policy at the right time to keep the populatio depedecy ratio at a reasoable level. Table 1 Chia's Agig Populatio i Agig marks Peak elderly populatio Agig level (%) Populatio aged 80 ad over populatio aged 80 ad over / total (100 (10 elderly populatio millio) First Stage Rapid thousad) (%)

2001-2020 agig stage Secod Stage 2021-2050 Accelerated agig stage 4.00 >30.00 9448 21.78 Third Stage Severe 4.37 Aroud 31.00-25.00~30.

4 agig stage Secod Stage Accelerated agig stage 4.00 > Third Stage Severe 4.37 Aroud ~ agig stage Source: Accordig to the 2010 Chia Populatio Agig Tred Forecast Report. Ecoomic developmet has greatly icreased the average life epectacy of Chia. Oe oly child has to take care of their parets ad 4 gradparets, causig huge pressures. Therefore, it s historically ecessary to adjust family plaig policy. Chia's family plaig policy has a sigificat impact o pesio system. The lack of the future labor force will directly lead to the vulerability of the old-age isurace system, drivig the reform of delayig retiremet age. From the figure below, populatio support rate becomes higher ad higher, which directly lead to pesio fud paymet risk. Policy to delay the retiremet age is clearly i order. Figure 1. Populatio Support Rate Will Chia have social security fud paymet crisis? Accordig to calculatio, i future 38 years, cumulative pesio gap will reach 75% of GDP, much higher tha the cost of evirometal protectio. Populatio structure ad pesio issues are cosidered as Chia s Achilles' Heel. 3. Research Aalysis: Aalysis of Sigle Two-child Policy ad Implemetatio Effect Sigle Two-child policy meas that couples would be allowed to have a etra child if oly oe paret were a sigleto ad the first child is ot a multiple. The policy has bee implemeted throughout the coutry sice The policy is widely discussed ad has very differet

5 opiios. Pro. Mu Guagog from Istitute of Gerotology i Pekig Uiversity thiks that birth iterval betwee two childre should be gradually cacelled. (Mu, 2015) Gu Baochag from Ceter for populatio ad Developmet Studies i Remi Uiversity said the adjustmet of populatio ad fertility policy lags far behid the actual eeds, the faster the better.(gu, 2014) Pro. Zhai hewu from School of Sociology ad Populatio i Remi Uiversity thiks it s ot mature to uiversally implemet the Sigle Two-child Policy, with too may risks.(zhai, 2015) 4. Effects of sigle two-child policy o Chia's populatio structure First, to icrease the proportio of youg people i our populatio, to icrease the workig populatio. Because of the policy, the total sie of the labor force i the et 15 years will be 28 millio more aually. Ad that will greatly alleviate the imbalace betwee supply ad demad of Chia's future labor force. (Tog Yufe, 2014) Secod, to reduce the degree of populatio agig, to optimie the populatio structure of Chia. Chia is oe of the fastest agig coutries i the world. (Wag Peia, 2013) The elderly populatio will reach a peak of 440 millio by the year The policy is helpful to alleviate the curret low birth rate, icrease the proportio of youg people, reduce the agig of populatio, improve the age structure of the populatio. Chia's populatio agig will declie to 23.8% i 2030 because of the policy. Third, to ease the curret situatio of the imbalace betwee me ad wome i Chia, to balace the se ratio at birth. Se ratio at birth i Chia is still high with i I a state of atural fertility, to ecourage fertility is a effective way to balace the se of the birth populatio. Fourth, to ehace family developmet ability. Presetly, the characteristics of the family i Chia are gradually showig the characteristics of small family sie, the core of the structure, the simplificatio of the relatioship ad the mobility of members. A separate two-child policy will help to avoid icreasig the sub-moo-childre family to alleviate the family structure, ehace the family's ability to support the elderly. The policy also cotributes to the healthy developmet of childre ad the family's ability to resist risks. 5. Further Aalysis of Supportig System: For The Sigle Two-child Policy I the 2008 Wechua earthquake, there were tes of thousads of families who lost their childre, icludig more tha 8 thousad families with oly oe child. Family uit is the basis of the atioal ecoomy, destructio of the family will ultimately udermie the most importat

6 part of the ecoomic system. Populatio policy i Chia should at least allow two childre i oe family to achieve populatio growth. (Coase,1991) I 2008, the fourth atioal health service survey showed that the prevalece rate of chroic diseases amog the people over the age of 65 was about 64.5%, of which the prevalece rate of chroic diseases amog the people aged over the age of the city was as high as 85.2% i Chia. It s worth worryig about the carig for high proportio of elderly patiets with chroic disease i the oe-child policy. Accordig to the ew samplig data (table below), the average life epectacy of wome is higher tha that of me, but the prevalece rate of chroic diseases is higher tha that of me. Table 2 The Prevalece of Chroic Diseases i People Over 65 Years Old Uit: % GENDER More tha More tha More tha oe disease oe diseases three diseases All Male Female Sample Data:32042(Male: 1526 people,female: 1678 people) Data sources: Iformatio from the Speech by Geg Qigsha of Guagdog Geeral Hospital o the secod sessio of the Guagdog provicial pesio service forum ad the Guagdog provicial Pesio Service Associatio Aual Meetig of o the Chia's family sie cotiues to shrik from The proportio of elderly people livig aloe is icreasig. Family marriage, fertility, pesio ad other traditioal fuctios are weakeed, the ability to resist risks decreasig. Chia has released the traditioal family policy, which is ecessary ad helpful. The adjustmet of fertility policy has a greater impact o wome tha that o me. Therefore, supportig policies are eeded. First, supportig female employmet. The sigle two-child policy will has a great ifluece o wome's employmet. To support female employmet, Chiese govermet should attach great importace o female employmet, who give birth to a secod child. To avoid the impact of employmet o wome's choice of fertility. Secod, to esure the stability of wome's jobs. Some wome do ot dare to have childre because they worry about losig their origial ideal job after materity leave. The govermet should act legislatio to protect the work of wome before birth. Third, icreasig wome welfare. Fertility is ot oly idividual behavior, but also social behavior. The govermet should improve the old-age isurace to assure the policy does ot

7 fall through. 6. Coclusios Domestic scholars i Chia have made a calculatio o fertility policy ad they have got some coclusios: (1). If the policy implemeted i the whole coutry, the umber of births per year will icrease by about 1 millio. However, the possibility to eceed 2 millio people is small. Chia's total populatio will peak i 2026 ~ The mea value of the peak populatio is 1 billio 401 millio, while the upper limit is about 1 billio 412 millio. (Wag, Zhag, 2014) (2) If the curret fertility policy remais uchaged ad the fertility level will remai basically stable, Chia's total populatio will peak i 2023 ~ The mea value of the peak populatio is 1 billio 392 millio, while the upper limit is about 1 billio 410 millio. Sigle two-child policy has a positive sigificace o realiig the balace of populatio scale ad structure. With the evolutio of time ad atioal coditios, the positive effects will gradually weake, ad the egative effects will begi to appear. 1. Policy is ot sufficiet to fully improve the age structure ad icrease the umber of labor. To promote the log-term balaced developmet of the populatio, the positive impact of the sigle two-child policy is very obvious, but relatively limited. It must be clearly see that ecept for effectively release some of the reproductive potetial, the sigle two-child policy ca do more i slow dow the tred of agig ad improvig labor supply ad demad patter. This policy is oly a partial adjustmet ad phased improvemet to prevet birth populatio from sudde chage ad avoidig the sudde icrease i resource ad evirometal pressures. The implemetatio of the basic priciples is a smooth ad orderly, gradual ad cotrollable, reasoable ad prudet. We have to cotiue improvig the adjustmet of fertility policy rather tha come to a stadstill. 2. The policy overall cosiderate about the cotributio rate of the populatio i the implemetatio of family plaig policy ad the feasibility of policy adjustmet ad perfectio, esurig the orderly likage with the origial birth policy. Chia beig vast i territory, there are sigificat differeces i fertility. Some areas already have the full liberaliatio of the two-child populatio coditios, while some areas do ot have the eed to cotrol fertility. Therefore, the full liberaliatio of two-child should ot set a timetable for reuificatio of the coutry. Accordig to the evaluatio of the effect of the implemetatio of the sigle two-child policy, a umber of highly developed areas ad some mature areas are give priority to the full liberaliatio of the two-child policy at the provicial level. Or the

8 policy ca be released i older age groups, to form the situatio of adjustig the birth policy step by step atiowide. Reduce the pressure o public services brought by the full liberaliatio of the two-child policy. 3. Full liberaliatio of two-child policy will achieve log-term balaced developmet of the populatio to create better coditios ad is the oly way to adjust ad improve fertility policy. It has a very sigificat impact o the level of fertility, populatio, labor force, the tred of agig ad so o. Assumig that we implemet the gradual liberaliatio of the two-child policy 5 years after the start of the sigle two-child policy, the peak of the total fertility rate i our coutry will break the replacemet level accordig to the results of populatio predictio. The total fertility rate will fall below the replacemet level util the birth of the basic eergy release is completed. Withi several years, it will be better for achievig log-term balaced developmet of the populatio if fertility levels are maitaied at 1.7 ~ 1.8, below but close to replacemet level. Affected by chages i fertility levels, the umber of births will be correspodigly high. But its peak will ot eceed 21 millio people, ad the will quickly fall. Chia's total populatio after the implemetatio of the policy will ot eceed 1 billio 460 millio people, populatio growth ad ero growth i egative growth will occur aroud It ca be see that Chia ca achieve relatively cotrollable populatio icremet, the total populatio beig relatively stable, which is the basis for esurig the balace of populatio sie. Ackowledgmet This work was supported by Major project of Key Humaities ad Social Scieces Base, Miistry of Educatio of the People's Republic of Chia< Research o social security fud ad solvecy maagemet >, Project Number: 16JJD Refereces Wag, G. Z. & Zhag L. P. (2012) How May Births Ca We Have? Estimatio of Potetial Policy Fertility. Socio-logical Studies, pp Cao Y. Z. & Ma J. (2012) The Proportio of Pesio Shortfall Will Reach GDP of Up to 75% I The Net 38 Years. Xi'a Eveig News. [12 Jue 2012].

9 Wag, G. Z. (2011) Prelimiary Study o the Effect of Chagig the Oe-child Policy o the Birth Populatio Sie of Beijig. Social Sciece of Beijig, pp Wu, X. W. (2010) The Effects of First Marriage ad First Birth o Secod Birth Iterval for Chiese Wome at Childbear-ig Age: A Study Usig Split Populatio Survival Model. Chiese Joural of Populatio Sciece, pp Li, W. & Che, Y. (2006) Chia Will Usher i the Peak of Populatio Agig i Chia Youth News. [29 September 2006]. Qiao, X. C. & Re, Q. (2006) The Choices of Chiese Fertility Policy i the Future. Market & Demographic Aalysis, pp.1-13, 66. Guo Z. G. (2004) Methodological Discussios o the Populatio Simulatios for Adjustmet of Fertility Policy. Chiese Joural of Populatio Sciece, pp.2-12.

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