The Central Bank of China (PBOC) document suggests giving up birth limits

BEIJING – China could be one step closer to abandoning its controversial birth control policy.

The central bank released a paper late Wednesday suggesting the country removes limits on the number of children it can have, suggesting that China should “fully liberalize and encourage birth.”

As China’s population began to age, the Chinese authorities began a few years ago to abandon the “one-child policy” of several decades and allow people to have two children. But births continued to decline, falling by 15% in 2020 in a fourth consecutive year of decline.

“In order to achieve the long-term goals in 2035, China should fully liberalize and encourage childbirth and eliminate the difficulties (faced by women) during pregnancy, childbirth and kindergarten and school enrollment by all means (possible ) ”, Four central banks researchers wrote in the English language summary in a working paper.

The 22-page document was dated March 26 and was distributed to the public on Wednesday.

The paper stated that the authors’ opinions do not represent that of the central bank. However, the call to drop birth restrictions marks the latest high-level discussion on how to address the problems of China’s aging population.

One of China’s main concerns is the impact that these demographic changes could have on economic development.

In two dedicated sections of the paper, researchers at the People’s Bank of China presented how these demographic issues put China at an economic disadvantage for the United States and India.

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

They noted how the United States benefits from immigration even as China’s population ages. Meanwhile, India’s population and workforce will soon surpass China’s, they said.

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

The authors added that China’s labor force is declining and will lose its advantage over the United States in the coming decades.

In 2019, China’s labor force as a proportion of the total population was 5.4 percentage points higher than the US. However, by 2050, China’s labor force will be 1.3 percentage points lower than the US, the newspaper said.

In a plan launched in March for economic development for the next five years and over, Beijing said combating the effects of an aging population is one of its priorities. However, they stopped removing the ban on Chinese families having more than two children.

Educational and technological progress is insufficient to counter the population decline, and China should remove birth restrictions, the authors wrote.

“If there is a slight hesitation, (we) will lose the precious window of opportunity for the birth policy to respond to the demographic transition and to repeat the mistake of developed countries”

The paper generally discussed how the aging of China’s population is more severe than that of developed countries. In particular, the authors noted that developed countries with an aging population tend to be richer, with a GDP per capita of at least $ 2,000, while China is half that of $ 1,000.

And once the older segment of the population starts selling properties, shares and bonds to finance their retirement, the ratio will approach that of the labor force that buys those assets, which could lead to increased price pressure, is shown in the newspaper. .

The Chinese authorities will publish the results of a census once a decade at the end of this month.