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China’s Three-Child Policy Won’t Help

Summary:
Alarmed by new data showing that its fertility rate is now similar to that of aging Japan, China has announced that it will permit families to have up to three children. Yet without broader reforms to address high costs of living and rural-urban divides, the new policy could make a difficult problem worse. IRVINE – In an effort to address rapid population aging, China has just announced that it will allow all families to have up to three children. The decision comes on the heels of widely publicized new data showing that the Chinese fertility rate in 2020 was only 1.3 per woman, which is similar to that of Japan (1.36 in 2019) and notably lower than that of the United States (1.7). Chile’s Constitutional

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Alarmed by new data showing that its fertility rate is now similar to that of aging Japan, China has announced that it will permit families to have up to three children. Yet without broader reforms to address high costs of living and rural-urban divides, the new policy could make a difficult problem worse.

IRVINE – In an effort to address rapid population aging, China has just announced that it will allow all families to have up to three children. The decision comes on the heels of widely publicized new data showing that the Chinese fertility rate in 2020 was only 1.3 per woman, which is similar to that of Japan (1.36 in 2019) and notably lower than that of the United States (1.7).

But a below-replacement fertility rate is only one part of China’s demographic problem. A second issue is the sheer size of its older population. Before 1971, Chinese family-planning policies were pro-natal, restricting access to contraceptives and family-planning education. As a result, the country’s current or soon-to-be elderly population has grown particularly large: the size of the population aged 15-24 is only around 72% that of those aged 45-54, compared to 79% in Japan and 100% in the US. This top-heavy demographic structure makes the problem of declining fertility even more acute, because new, younger workers are needed to replace those who will retire and require support.

A third issue is urban-rural inequality. China’s rural population is generally prohibited from moving to urban areas by the country’s hukou system of residency permits. Rural residents thus have had fewer opportunities to...

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