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Total number of migrant workers 2006-2011 (millions) 300 250 200 150 100 50 0

2006 2007 2008 2009 2010 2011 2012

Percentage of migrant workers by age group in 2011

16-20 / 6.3% 21-30 / 32.7% 31-40 / 22.7% 41-50 / 24.0% 50+ / 14.3%

Number of migrant workers by age group in 2011

Manufacturing Construction Tertiary Wholesale & Retail Transportation, warehousing & post Catering Household and other services

Source: National Bureau of Statistics

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highlighted since 2000 when the average fertility rate dropped from 5.8 to 1.8 births per family. This was immediately interpreted by analysts as a signal of relaxing the policy. However, it is clear that even if the One Child Policy were abandoned today, factory bosses would have perhaps a twenty-year wait before they could reap another demographic dividend if at all. This makes the calls for removing the policy, while popular, economically irrelevant – at least in the short term. The effectiveness of lifting the One Child Policy in the economic sense is based on two assumptions. Firstly, that fertility rates will rebound sharply and immediately once the government is no longer restricting births, and secondly an economic growth model based on intensive, cheap labor will be both desirable and possible for China’s future. The “low fertility rate” of 1.8 claimed by the government has little traction among either advocates or detractors of the One Child Policy. The UN World Population Prospect Report of 2010 put China’s fertility rate at 1.67 between 2000 and 2010. This number was most optimistic of the independent surveys, most of which gave figures ranging from 1.2 to 1.6. China’s falling fertility rate is due to more than just the impact of the One Child Policy. As in all societies, urban Chinese women have a much lower average fertility rate than their rural counterparts. In Shanghai, where the average fertility rate is currently 0.8, for example, the only group that has reached the government’s targeted 1.8 fertility rate are women with no education. Shanghainese women with a postgraduate level of education have an average fertility rate of only 0.36, according to local statistics office figures released in 2011. As in developed countries, rising standards (and costs) of living and a tendency towards marrying later among young Chinese have hampered traditional enthusiasm for having more kids. Even researchers who oppose an immediate curtailment of the birth control policy recognized that there is little likelihood of a sudden baby boom once the control is lifted as urban, working women are unlikely to be eager to drop everything to give birth – halving their household income and doubling their costs in the process. As for the second assumption – that an end to the One Child Policy will allow China to continue to maintain a low-cost, low-value and laborintensive growth model indefinitely, is also based on a faulty understanding of economic trends. No worker or country in the world welcomes the idea of remaining at the low, cheap end of the global supply chain forever. No historical examples of sustained, low-cost, labor-intensive growth exist simply because growth is only sustainable if it is matched with corresponding rises in income and living standards. The only route towards prosperity is racing to the top, not staying at the bottom. China is already moving up the chain. In short, China’s most valuable resource, its population, is no longer sustainable or reliable, meaning an overhaul of the national development strategy is essential. Managing existing and future human resources, along with any demographic shifts, should remain at the core of this strategy. The secret to success will be both the government and captains of industry effectively repurposing China’s working population by rebalancing its entire economic structure. CHINA WEEKLY I March 2013

April 2013  

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