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Why China Ended its One-Child Policy

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Oct 05, 2018

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Why China Ended its One-Child Policy
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  • This video is sponsored by Dashlane.
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  • China is huge.
  • The kind of huge that’s hard to wrap your head around.
  • Beginning in the 1950’s, its population exploded, from an already respectable 500
  • million to almost three times that today.
  • which makes it bigger than all of North America, Australia, and Europe combined.
  • Its consistent economic growth has made it one of the world’s great powers,
  • with enough military might to claim the strategically important South China Sea,
  • and enough influence to begin the most ambitious infrastructure project in history.
  • A $1 trillion dollar network of ports, pipelines, and railroads across 65 countries.
  • But none of this was inevitable.
  • While China rapidly and forcefully industrialized, it faced massive famine and housing shortages.
  • Its economy needed time to develop, and the world deeply feared overpopulation.
  • China’s response was the famous One Child Policy, which limited ethnic Chinese families
  • to a single child, with a few exceptions.
  • To enforce the law, women were forcefully sterilized and fined for having too many children.
  • The problem is: it worked.
  • Or, something did.
  • Historians doubt it prevented all 400 million births claimed by the government, But China’s
  • Total Fertility Rate, the average number of children a woman will have in her lifetime,
  • has fallen all the way to 1.6,
  • well below the 2.1 needed to maintain its size.
  • There simply aren’t enough children, and in a few short years, China will begin to
  • shrink.
  • The One Child Policy was repealed in 2015, but it won’t make a significant difference,
  • because it only ever sped-up the unavoidable: As nations develop, they choose to have drastically
  • fewer children.
  • China’s problem isn’t unique, about half the world lives in a country that is or soon
  • will be in the same position, but it is uniquely big, and the timing, uniquely bad.
  • The story of China in the 21st century is just as much about demographics as it is GDP,
  • military power, the rule of Xi Jinping, all of which will be seriously tested by the coming
  • demographic crisis.
  • To understand why it’s such a threat, and whether something can be done, we need to
  • look a little more closely.
  • As individuals, humans are unpredictable.
  • We don’t know what someone will do, or say, or buy, because they don’t know.
  • Impulse guides your decision to add guacamole just as it does what college you attend.
  • But, countries don’t care about individuals, they care about groups.
  • And the beauty of demography is that groups are predictable.
  • Very.
  • Of course, nothing is certain, theories compete and estimates vary, but it’s much easier
  • to guess how many 18-years-olds we’ll have in 30 years and in general, what they’ll
  • be doing than, say, the next three decades of foreign policy or culture.
  • No country has yet figured out how to manufacture 18 year olds, not even China, and that means
  • population today is a good peek at population tomorrow.
  • When this information is combined with geopolitics or economics, it goes from mildly interesting
  • to downright powerful.
  • Here’s what we know about China:
  • Each of these lines is one of its age groups, with babies at the bottom, and elderly at
  • the top.
  • First, are consumers.
  • From 18 to 45, we know people are spending - they’re going to school, taking out loans,
  • saving… not so much.
  • and despite what this group says about millennials, they’re very important, because consumer
  • spending is one of the biggest contributors to economic growth.
  • Next, are the money makers.
  • These people have paid off their debt, now they’re saving for retirement.
  • And even though they’re a smaller share of the population, they generate most of its
  • income.
  • In the U.S., for example, they alone pay half of all income tax.
  • That makes them, a government’s best friend.
  • Finally, at age 65, people are done working, done saving, and, largely, done spending.
  • What’s special about this group, is how quickly and how dramatically it begins:
  • In a single day, a retiree often goes from contributing the highest taxes of their lifetime,
  • to almost nothing, as they slowly collect pensions and social security.
  • For right now, let’s ignore the total number of people.
  • China could be bigger like this, or smaller like this,
  • What’s important is the balance between these different groups, and that’s why this
  • graphic is so useful.
  • It’s called a Population Pyramid, because, for most of history, it has been.
  • A constant stream of babies at the bottom, and a small number of deaths with each subsequent
  • year.
  • A good example is Niger, where the average woman has 6.5 children.
  • Mortality is very high, making the average age only 15.
  • But much of the world no longer looks like a pyramid.
  • In China, it’s turning upside down.
  • As you can see, there are two big bulges in its population, here and here.
  • The first is currently in its peak spending years.
  • The second, right in the prime of its high-earning, high-tax-contributing years.
  • It’s no wonder China is seeing massive economic growth.
  • But that’s what makes a demographic crisis such an ugly one: it happens verrryyyy slowly,
  • and then, all at once.
  • Remember, this huge groups of workers will soon, and quite suddenly retire, as they start
  • waiting for the checks to arrive.
  • But the group responsible for writing those checks, or at least, funding them, is getting
  • smaller and smaller.
  • The problem isn’t just financial, A single child must now care for two parents and four
  • grandparents.
  • The United Nations expects China’s Dependency Ratio, the number of non-working compared
  • to working-age people, to increase at roughly the same rate as Japan’s, whose population
  • began shrinking in 2011, and now sells more adult diapers than infant ones.
  • By 2050, China may have more retirees than all of Germany, Japan, France, and Britain.
  • Worse, the One Child Policy, combined with a cultural preference for males, has created
  • a massive gender imbalance.
  • As a result, it’s likely that by 2030, one-fourth of Chinese men in their late 30’s will have
  • never married.
  • At a minimum, an abundance of forgotten young men will cause some social anxiety.
  • Or possibly, as some experts suggest, serious conflict.
  • It sounds a lot like the plot of a movie.
  • Perhaps, “No Country for Young Men”
  • Of course, China is aware of the problem, But it’s fighting an inevitable demographic
  • transition.
  • In the beginning, For China, the early 20th century, children are abundant.
  • Because: you can only expect a few to survive, you don’t have the education or tools for
  • family planning, and because the best way to grow tomatoes is to first grow children.
  • Seriously.
  • For any sleep-deprived parents watching, this will be a shock, but giving birth was once
  • the ultimate productivity hack.
  • Before there were tractors, there were children.
  • And then, people stop dying.
  • It really only takes a few improvements to healthcare for rapid reductions in mortality.
  • And that’s how the world grew from 1.6 to 6.1 billion people in one century,
  • That short window where fewer people are dying, but everyone’s still having children.
  • But it is just a window, after mortality drops, fertility is right behind it.
  • As industrialization brings rural workers to find jobs in the city, Children become
  • less a utility and more a liability - the kind that screams, and cries, and generates
  • student loan debt.
  • As the saying goes: the best contraceptive is economic development.
  • The fact that countries like China, the U.S., Italy, and Germany, have this problem, is
  • an otherwise good sign.
  • Dangerously low fertility is actually a side-effect of many good things: increased education,
  • opportunities for women, and healthcare.
  • It’s a no-kidding first-world problem.
  • There are many ways to offset the damage, you can increase productivity, taxes, immigration
  • and/or fertility,
  • But it’s hard to find a solution that doesn’t come with its own set of problems.
  • Many countries, for example, now offer incentives for having children.
  • One of the most generous is Sweden, where couples have the right to 480 days of paid
  • maternity leave PER child.
  • The downside?
  • Employers are more hesitant to hire young women, who are far more likely to take those
  • days off.
  • And it doesn’t help that, even adjusted for inflation, the cost of raising a child
  • has risen for decades.
  • Babies just can’t compete with dogs.
  • China has already gone from issuing fines for second children to issuing checks, but
  • people just don’t seem to want them.
  • This paper predicts the new two-child policy will only increase China’s population from
  • 1.4 to 1.45 billion in 2029.
  • Because a person’s ideal family size is largely determined by their own, two generations
  • of Chinese now see one child as the norm.
  • Plus, young people are pressured to work longer and harder to keep up with the rising taxes
  • needed to support the older population.
  • None of this means China can’t come up with a solution,
  • In fact, it has a few things going for it:
  • As people move to the city, they’ll become bigger contributors to the economy,
  • And today’s young workers are far better educated than those they’re replacing - 11
  • years of schooling compared to just 6.
  • There’s also the bigger trend towards an automation-based economy which doesn’t rely
  • on a such a large number of workers.
  • But that too, has the potential for chaos.
  • And even if it does manage to increase fertility, remember that demographic changes are slow.
  • Children born today won’t start contributing for at least 18 years.
  • Whatever the outcome, it’ll define China’s role in the 21st century.
  • The One-Child Policy will test China’s national security… just as your One-Password Policy
  • could threaten your security.
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China has huge ambitions for the 21st century. But it’s demographic problems will be a significant challenge on the way there.

This includes a paid sponsored promotion which had no part in the writing, editing, or production of the rest of the video.

Music by Epidemic Sound: http://epidemicsound.com

Demographic explanations are inspired in part by several chapters of “The Accidental Superpower” by Peter Zeihan. It’s a great book and although this video is only a small slice (and not the main argument), it’s very interesting and worth reading. He’s the source of a couple specific phrasings like “countries can’t manufacture 18 year olds” which I think help explain the issue well.

Maps: North America, Europe, Australia, China, Globe - Single Color by FreeVectorMaps.com
Full list of sources: https://pastebin.com/rt2e6B51

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