Chinese written by Xinwei Liu
Translated by Charles Qin

A joke has been recently making the rounds on the internet: on hearing that China was releasing a two-child policy, Australian cows started to shudder.

Internet commentators have humorously stated that after allowing for a second child, the family planning slogans in Chinese villages and rural communities have already changed to “get pregnant, get born, get good care, don’t get an abortion.” And “as the economy gets going, so too does the population have to keep pace”. As a major power with a population of 1.3 billion, China’s family planning policies not only shape China’s future but impact on the entire world.

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Fifty Years of Family Planning

For more than 60 years, being the hugely populous country that it is, China’s family planning policies
have experienced continual changes.

From 1949-1961, the government imposed strict limits on abortions and encouraged population growth. China
experienced its first baby boom. From 1962-1969, family planning policies were proposed and put into trial implementation in some cities and counties.

In 1971, the State Council approved and circulated the “Working Well in Family Planning Report”, emphasising “there would need to be family planning”. In the “Fourth 5-Year Plan” formulated that year, the view “that having one is not sufficient, having two is just right, and having three is too many” was advocated.

In December 1973, the first national family planning meeting proposed a “later, longer, fewer” policy. “Later” referred to men marrying at or over the age of 25, and women marrying at or over the age of 23, and for women to have children after they turned 24; “longer” referred to the interval between births being over three years; “fewer” referred to a husband and wife not having more than two children.

Although the rationale and initial family planning policy was then present, it was basically voluntary in principle and devoid of overriding obligations or force. Hence, between the years 1962 and 1976, China would welcome its second baby boom, which would continue ceaselessly for 15 years, holding to a peak of more than 20 million year-on-year.

March 1978 marked the date from which family planning would take on a legal form and enter into the Chinese constitution. The Chinese government very clearly outlined its promotion that “the best number of children for a husband and wife is one, and at most two.”

On 25 September 1980, the Communist Party of China’s Central Committee published “An Open Letter to All Members of the Communist Party and Communist Youth League on the Issue of Controlling Population Growth”, advocating for “one husband and wife only having one child”.

And so it was – the one child policy was formally established. The “Population and Family Planning Law of the People’s Republic of China” put into practice in September 2002 clearly stipulated that the country was to stabilise and maintain the family planning policies currently implemented, and encouraged citizens to marry and have children later; advocating that a husband and wife have one child.

Thus we saw: “pregnancy on certification, childbirth on validation”, “don’t abort, get seen then you’re caught”, “induce it, miscarry it, just don’t carry it to term”, “better to add ten graves than one knave”, “have less kids plant more trees, have less kids raise more pigs”… As a “national policy”, this one child policy has been forcefully implemented for thirty years.

From the 1980s, those children born during the first baby boom had all entered the workforce, and those born during the second baby boom started to reach working age. From 1962 and the proposal of “family planning” policies and thinking, and after its partial pilot implementation, the population increase figures started to waver. Rapid increases in the working age population, a slowdown in new births, the fact that the senior population had not yet experienced a large increase (since the founding of modern China the first “baby boomers” were still in their prime during the 1980s), as well as more gradual increases in the overall population would serve to raise the proportion of the population of working age, and lower childcare rates.

The boost in the working population brought about by the two “baby booms” would become apparent on a large scale from the 1980s, when China would begin to enjoy a thirty-year population dividend payoff. Entering the 21st century, a family planning policy that has now been continuing for 30 years has brought great changes to the form, shape and nature of China’s population. Demographic issues are becoming more and more important and are impacting on economic and social development. Statistics from the sixth national census calculate the overall birth rate for Heilongjiang, Jilin and Liaoning as 1.03, 1.03 and 1.0 respectively, even lower than for Japan and South Korea.

Such a population precipice is now posing a threat to economic growth. At the same time, a look at the whole country shows similarly low figures. The “Economic Blue Paper: China’s Economic Situation and Forecast for 2015” published by the Chinese Academy of Social Sciences points out that China’s current birth rate has already dropped to a low level of 1.18, far lower than the replacement level of 2.1, having broken through the internationally recognised “low fertility trap” rate of 1.3. Should the family planning policy now in force be maintained without change the overall birth rate will continue to drop, and the population as a whole will sharply reduce after reaching a peak. This will impact on the evenness of population growth in the long term as well as future development and progress for the Chinese people.

The two major factors propping up the population dividend: the high proportion of people in the population of working age, and the low childcare rate will have seen a turning point in 2010 and 2011 respectively, which is to say that there will be a reduction in the proportion of people of working age, and an increase in childcare rates. The population dividend will slowly start to dissipate according to statistics published by the National Bureau of Statistics – at the end of 2015 China had an overall population of 1.3746 billion people, an increase of 6.8 million people on the previous year. As the ageing of the population continues to intensify, the proportion of those aged over 60 in the general population will reach 16.1%, an increase of 0.6 percentage points on the previous year, meaning that by the 2030s 400 million people will be aged over 60, making up one quarter of the total population. There will continue to be a decrease in the number of those of working age in the population, a net reduction of 4.87 million people on the previous year. And the gender disparity ratio for new births will drop from 115.88 in 2014 to 113.51.

A low birth rate and an ageing of the population has led to a Lewisian turning point for the Chinese economy. Due to the ageing of the population brought about by a reduction in population, issues such as weakening demographics, a weakening economy, aged care problems and national security are now inevitable. In November 2013, the Third Plenary Session of the 18th Chinese Communist Party (CCP) approved the “Decision on Several Major Issues of Deepening Reform”. The policy proposed for implementation was one where husbands and wives who are only children would be allowed two children, to better promote even long-term population development.

On 29 October 2015, announcement of the Fifth Plenary Session of the 18th CCP advocated the full implementation of a policy whereby a husband and wife may have two children, actively pushing forward in response to the ageing of the population.

The realisation and implementation of this policy signals an end to the “one child policy” implemented for 35 years, and has also signalled the full unveiling of a two child policy.

As a result: “get pregnant, get born, get good care, just don’t get an abortion”, and “for those not born we mourn”, “to not care for whom you should care, old age will be alone and bare”, “should the village want to make it big, you should have more children to till and dig”… As a result, those born in the 50s and 60s are having a hard time deciding between whether to have another son or another grandson; those born in the 1970s are anxious about whether they should have another child, and whether it is even possible for them to have another; those born in the 1980s are anxious about whether their mother-in-law and wife are both observing their postnatal rest periods at the same time, and which of them will get more attention; those born in the 1990s and 2000s are anxious about whether it is would be better to refer to children they see as a ‘brother’ or an ‘uncle’…

Chinese society will experience profound change due to the release of the two-child policy.

The Significance of the New Policy

Experts predict that after the implementation of the new policy, the growth of China’s population over the next few years will go up to levels last seen around the year 2000, which is to say, 17.8-19.5 million new babies every year – an increase of about 9%-19% on the 2012 level of 16.35 million. In 2017, China will reach a peak in new births, with the mean birth rate in 2017 at approximately 22-30 million.

Will the two-child allowance bring massive “child power” with it? Chairman of the Ctrip Travel Network, Stanford Economics PhD, and Research Professor at the Guanghua School of Management in the Department of Economics at Beijing University, Liang Jianzhang, who has been consistent in calling on the government to thoroughly liberalise family planning, has performed some calculations: “When you calculate it looking at the ¥30,000 worth of consumption brought about through each child every year, then the consumption increase every year will be ¥75 billion.

In addition to this, along with increases in the population from new births, civil and government investment within such areas as housing, education, infrastructure and services and so on will need to be significantly increased. Hence, for the first 5-10 years, an additional ¥225 billion may need to be invested every year. When the forecast data mentioned above is added together, the ¥300 billion would be equivalent to extra growth in China’s GDP at a level of around 0.5 percent. This will serve to boost domestic and foreign investor confidence in China’s economy.” “Not only would this serve to boost investment and consumption within the short term, most fundamentally, because more young people now being born due to the liberalisation of family planning policies, there will be a constant stream and flow of manpower and energy being invested towards revitalisation for the whole Chinese people.”

Professor Gu Baochang from the Population Development Studies Center at China’s Renmin University states that “Comprehensive liberalisation in two child family planning will be of benefit to the optimisation of demographic structures, will increase the supply of manpower, and reduce the burden of an ageing population; it will be of benefit in boosting the ability of families against risk, increase the provision of labour resources in the future and ameliorate the childcare burden from the aged; it will be of benefit in expanding domestic demand and ensuring steady economic growth, will invigorate society, boost its innovative capabilities and raise our nation’s level of international competitiveness.

Comprehensive liberalisation in the two child policy will have a restorative effect on demographics around ageing, will equalise sex disparity ratios for new births, as well as exert progressive effects on population characteristics, benefit the family composition, raise the capability of families to against risk and improve their economic and social capabilities, and also help to optimise children’s education.

A Two Child Economy

Some organisations have forecast that for 2016-2017 – the first year after the implementation of the second child policy – that new births will exhibit a lower peak of 20 to 23 million, and between 2029 and 2030 China’s population will reach its high of 1.45 billion people.

There is no doubt that the somewhat abrupt release of the two-child policy will impact on and bring pressure to bear on food security in China as well as health and sanitation, education, employment and other basic public services. Facing the despatch of policies from on high, are there mature preparatory policies in hand in terms of support for economic, social and family development? Have the corresponding infrastructure, public services, allocation of family assets, career planning and family linkages in all areas been well prepared?

In the next several years, China will see a large number of people in high risk groups give birth, and this will place even greater demands upon hospitals. In fact, the reality in the near term is that even in Beijing, with the highest national level of healthcare, and irrespective of the price of a pregnancy check-up being around ¥2000, similar services provided by some postnatal support organisations are in fact priced at ¥3000, and pregnancy check-ups at most hospitals and organisations are booked out a week in advance, with some famous hospitals even booked out over a month in advance.

So what about antenatal examinations, hospital beds, midwifery, postnatal care, toddler foods, child and baby products, paediatrics, preschool, early learning, adolescent learning…?

One can read the signs. 

The comprehensive liberalisation with the two-child policy can serve to propel the growth and development of multiple domestic industries, bringing forth a market increase of 300 billion yuan. From the point of view of consumption, a significant increase in new births will grow household consumption, and those industries affected by or involved in the birth and maturing of children will experience a boost in demand, such as antenatal care, reproductive assistance services, pregnancy medications, infant milk powder, everyday infant products, medicines for children, children’s clothes, toys, cartoons, early childhood education, stationery and other such industries. Some organisations have forecast that in the next three years, the size of the market for child and infant industries will expand to more than 3 trillion yuan, with an average annual growth rate of approximately 20 percent. Demand means profit and insufficient supply to meet demand means massive profits. Of those families that may want a second child, the vast majority are relatively well off financially, and their powers of consumption are mostly relatively high. This is a massive market. The market has already sensed opportunity, and with the influence of policy dividends in tow, the “two-child economy” has begun a powerful assault.

Recently, life insurance companies such as China Life Insurance, the People’s Insurance Company of China, Sunshine Insurance, China Pacific Insurance and so on have gradually started promoting their “second child insurance”, amongst which are more than ten insurance types such as post-abortion nutrition insurance, pregnancy insurance, miscarriage insurance, birth defect insurance, etc, with insurance premiums ranging from more than ¥100 to nearly ¥1000.

The two-child policy will increase market demand for nannies, breastfeeding support, and housekeeping personnel, and housekeeping staff shortages will increase.

The early childhood education and housekeeping markets will have to gradually increase personnel numbers for early childhood instructors and nannies and the price of their services will gradually see an increase.

The children’s clothing market has suddenly become a “hot item” with enormous potential. “We estimate that milk powder sales volumes will increase by about 20%.” One overseas infant formula agent frankly expressed that he has passed the news onto overseas companies in the hope that they will be able to increase production so as to boost their ability to supply the Chinese market.

All types of shopping centres have been busy expanding the amount of shop space given over to children’s clothing, and big fashion brands have been gradually raising prices in their children’s operations, maternity wear, milk powders, strollers, nappies, bunk beds … maternal and children’s healthcare, education and training, educational literature, the games industry, fashion and clothing, the electronics industry,the family travel industry and so on, from kindergartens to real estate 20 years later – everything is gearing up.

China’s Second Children and Australia

Recently a humorous new saying has been making its way around the Internet:

It is said that after China’s release of the two-child policy, Australian cows’ udders are starting to shudder; after news of China’s release of the two-child policy was conveyed to Australia, Australian cows collapsed on the spot: there really won’t be any milk left over!

In terms of Australia’s response to China’s new policy of allowing for two children, those happiest in the short-term must be buying agents, and they are presently gearing up for it; those least happy are likely to be Australian mothers, as it may now be even more difficult for them to buy milk powder.

On 15 April, Lucy Turnbull, wife of the Australian Prime Minister, personally came and observed notable Australian health products company Blackmores make a donation to the “Heart Ali” charity as Australia’s government representative. The implications require no further explanation.

The implementation of the two child policy will directly propel the development of related industries in each country, and the needs of the Chinese for Australian healthcare products, milk powder, infant foods, medicines, eggs, and meat products will become greater still. After the implementation of the policy, Blackmores’ pregnancy-assisting Pregnancy and Breast-Feeding Gold, male and female Elevit and other Australian products will become targets of key concern, and even more sellable. Australia’s healthcare
products, dairy, and infant food industries are all poised with anticipation, preparing to march into China’s huge market. First in the world to successfully nurture a test-tube baby, research centre Monash IVF plans to use the excellent opportunity provided by the reforms to China’s family planning policies to open up and explore the Chinese market.

Visiting scholar from New South Wales University Business School, Vic Edwards, has stated that China’s second child liberalisation may bring Australia benefits in the short-term.

Could it be that this scholar is being too conservative?

“Benefits in the short term”? The children will grow up. One can assert that in the next twenty years, China’s two child policy will bring benefits to Australia’s education, immigration, travel, mining, and real estate industries; China’s two-child policy will comprehensively benefit Australia!

Let’s wait and see.