The Chinese central bank (PBOC) proposes to drop birth limits

BEIJING – China may be one step closer to abandoning its controversial childbirth restrictions.

The central bank released a paper late Wednesday suggesting the country lift the limits on the number of children people can have, suggesting that China should “liberalize and encourage childbirth completely.”

Several years ago, as the Chinese population began to age, the Chinese authorities began to reverse the decades-old “one-child policy” and allow people to have two children. But births continued to decline, dropping 15% in 2020 in a fourth straight year of decline.

“To achieve the long-term goals by 2035, China must fully liberalize and encourage childbirth and by all means remove the difficulties (faced by women) during pregnancy, childbirth and kindergarten and enrollment in school,” four central bank researchers wrote a working paper in the English abstract.

The 22-page document was dated March 26 and was shared publicly on Wednesday.

The newspaper stated that the authors’ views do not match those of the central bank. However, the call to lift birth restrictions marks the latest high-level discussion of how to address the problems of China’s aging population.

One of China’s major concerns is the impact these demographic changes can have on economic development.

In two special sections of the paper, researchers from the People’s Bank of China explained how these demographic issues put China at a disadvantage economically relative to the US and India.

“If my country has narrowed the gap with the US over the past 40 years by relying on cheap labor and the bonus of a huge population, what can it rely on for the next 30 years? This is worth thinking about” , the authors wrote. in Chinese, according to a CNBC translation.

They noted how the US is benefiting from immigration even as the Chinese population is aging. Meanwhile, India’s population and workforce will soon exceed China’s, they said.

From 2019 to 2050, China’s population will decline by 2.2%, while that of the US will increase by 15%, the paper said, citing UN estimates.

The authors added that the percentage of the workforce in China is declining and will lose its lead over that of the US in the coming decades.

In 2019, the Chinese workforce as a percentage of the total population was 5.4 percentage points higher than in the US. However, by 2050, the Chinese workforce will be 1.3 percentage points smaller than in the US, the paper said.

In a plan released in March for economic development for the next five years and beyond, Beijing said countering the effects of aging is one of its priorities. However, they stopped lifting a ban on Chinese families having more than two children.

Educational and technological advancements are insufficient to stem population decline, and China should lift restrictions on births, the authors wrote.

“If there is any hesitation, (we) will miss the precious opportunity for birth policies to respond to the demographic transition, and repeat the mistake of developed countries.”

The paper discussed in general how the problem of the aging population of China is more serious than that of developed countries. In particular, the authors noted that developed countries with an aging problem are generally wealthier with a GDP per capita of at least $ 2,000, while China’s is half of $ 1,000.

And once the older segment of the population starts selling real estate, stocks and bonds to fund their retirement, the ratio will be close to that of a workforce buying those assets, which could result in increased price pressure, the paper said. .

The Chinese authorities will publish the results of a census held every ten years later this month.