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China’s New Three-Child Policy

The Chinese government allows families to have three children, amending its two-child policy [Photo credit: CNN]
The Chinese government allows families to have three children, amending its two-child policy [Photo credit: CNN]

On Monday, May 31, the Chinese government announced that it would further ease its family planning policy by allowing every couple to have three children. Replacing China’s two-child policy, the three-child policy is part of the country’s broader goal to tackle the country’s aging population, shrinking workforce, and societal challenges.

A Brief History of China’s Family Planning Policies:

Since 1978, the People’s Republic of China has been ranked the most populous country in the world, with a population nearing one billion people. In efforts to slow its population growth, China implemented several measures including a family-planning initiative that encouraged Chinese families to have only one child or at most two. By 1982, the Chinese Communist Party incorporated the one-child policy into its new Constitution, making the policy a civic duty. In 2016, the central government extended its family planning to two children.

Why did the government implement a three-child policy?

The National Statistics Bureau of China (NBS) released their seventh census which shows the Chinese population growing at its slowest rate since generations [Photo credit: Statista]

After years of trying to curb its growing population under the one-child policy, while at the same time undergoing rapid industrialization and urbanization, China started experiencing a decline in birth rate, an aging population, and a growing gender gap.

The decision to expand its childbearing policies came shortly after the central government released its latest national census. The 2020 census recorded 12 million births, an 18 percent decline from the previous year representing the lowest number of births since 1961.

China is not the only country confronting a slow growth rate. The United States’ 2020 census revealed the nation’s second-slowest population growth, only .1 higher than the one following the U.S. Great Depression. While the COVID-19 pandemic has taken a toll on the American and Chinese populations, both countries have been facing these demographic trends for the past decade.

What does the three-child policy entail?

Three newborn babies lying side-by-side. [Photo credit: Yahoo Finance]

The three-child policy is part of the Chinese Communist Party’s broader plan to tackle its shrinking workforce and aging population. Alongside its new policy, the central government pledged to raise the retirement age in “a phased manner,” according to a report by the Xinhua News Agency.

Additionally, the government committed to implementing support policies related to child birth, including education and health costs. Acknowledging that pregnancy discrimination still poses a constraint to childbearing for working women, the government promised to “protect the legitimate rights and interests of employed women.” It also set out to implement programs educating young Chinese citizens on relationships and marriages.

What does China’s three-child policy mean for the future?

Children play at a kindergarten in Yantai, Shandong, on 31 May 2021 (AFP/Getty) [Photo Credit: The Independent]

Some worry that removing restrictions on childbearing could have “unintended consequences” by creating a population imbalance between China’s rural and urban populations. The assumption is that the rural community would grow at a faster pace than its urban counterpart, which could potentially increase poverty levels and create employment pressures. For industries that directly rely on the Chinese market, the shrinking workforce generates fear of secondhand economic consequences that would ensue if China’s economic output falters. According to several Bloomberg economists, China could generate the world’s largest economy if it implements the right set of policies.

For Andy Mok, a demographic expert and fellow at Center for China and Globalization (CCG), the growing digitalization trend in China should alleviate worries about a shrinking workforce. In his op-ed, he argues the following: “as China’s economy becomes more advanced, a workforce that is smaller but more highly trained and specialized may be a key source of competitive advantage more valuable than a merely large one.”

Founder and President of the CCG, Huiyao (Henry) Wang, provides the following analysis: “If this adjustment doesn’t help, then that would help them make a future decision.” Only time will tell whether the comprehensive three-child policy successfully adjusts China’s demographic shift and the extent to which the Chinese digital market affects the Chinese labor force.

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