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What Was China's One-Child Policy? Its Implications and Importance


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ADAM HAYES

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Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

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Updated December 12, 2023

Reviewed by SOMER ANDERSON

Fact checked by MELODY KAZEL



Investopedia / Jiaqi Zhou


The Chinese government implemented the one-child policy mandating that the vast majority of couples in the country could only have one child. The phrase “one-child policy,” used often outside China, can be a bit misleading: the one-child rule didn't apply to all, exceptions were frequently made, and local officials had discretion over how population limits were achieved.1 These collective efforts were nevertheless intended to alleviate the social, economic, and environmental problems associated with the country's rapidly growing population. The rule was introduced in 1979 and phased out in 2015.2


KEY TAKEAWAYS

  • The “one-child policy” is a name given to Chinese government laws for controlling population growth. According to estimates, it prevented about 400 million births in the country.

  • Introduced in 1979 and discontinued in 2015, the policy was enforced through a mix of incentives and sanctions.

  • The one-child policy has had three important consequences for China's demographics: it reduced the fertility rate considerably, it skewed China's gender ratio because people preferred to abort or abandon their female babies, and resulted in a labor shortage given the increasing proportion of the population who were older adults.

Understanding China's One-Child Policy


The one-child policy refers to a set of laws implemented beginning in 1979 in response to explosive population growth that government officials feared would lead to a demographic disaster. China has a long history of encouraging birth control and family planning. In the 1950s, when population growth started to outpace the food supply, the government started promoting birth control.


However, by the late 1970s, China’s population was quickly approaching 1 billion, and the Chinese government considered ways to curb population growth. This effort began in 1979 with mixed results but was implemented more seriously and uniformly in 1980, as the government standardized the practice nationwide.3


There were, however, exceptions for ethnic minorities, for those whose firstborn was labeled as disabled, and for rural families whose firstborn was not a boy. The policy was most effective in urban areas since those in China’s agrarian communities resisted it to a greater extent.4


Initially, the one-child policy was meant to be a temporary measure, though, in the end, it may have prevented up to 400 million births.5 Ultimately, China ended its one-child policy after it became apparent that it might have been too effective: many Chinese were heading into retirement, and the nation’s population had too few young people to provide for the older population’s retirement and healthcare while sustaining continued economic growth.5


The government-mandated policy was formally ended Oct. 29, 2015, after its rules had been slowly relaxed to allow more couples fitting certain criteria to have a second child. Now, all couples are allowed to have two children.5


Enforcement


There were different methods of enforcement, including incentives and sanctions, that varied across China. For those who complied, there were financial incentives and preferential employment opportunities. For those who violated the policy, there were sanctions, economic and otherwise. At times, the government employed more draconian measures, including forced abortions and sterilization.1


The one-child policy was officially discontinued in 2015. The efficacy of the policy itself, though, has been challenged, as it's typical that population growth generally slows as societies gain in income, as happened in China during this time. In China's case, as the birthrate declined, the death rate declined, too, and life expectancy increased.5


One-Child Policy Implications


The one-child policy had serious implications for China's demographic and economic future. In the early 2020s, China's fertility rate stands at 1.6, among the lowest in the world.6 (The U.S. is at 1.7.)


China now has a considerable gender skew—there are roughly 3 to 4% more males than females in the country. With the implementation of the one-child policy and the preference for male children, China had a rise in the abortion of female fetuses, the number of baby girls left in orphanages, and even in infanticides of baby girls.7


This continues to affect marriage and birthrates around the country. Fewer females means there were fewer women of childbearing age in China.8 The drop in birthrates meant fewer children, which occurred as death rates dropped and longevity rates rose. It is estimated that the share of adults ages 65 and older will have risen from just 12% to a projected 26% by 2050.9 Thus, older parents will be relying on their children to support them, and have fewer children to do so. This is compounded by the massive urbanization of China since 1980, with those living in urban areas increasing from 19% in 1980 to 60% in recent years.10 China is also facing a potential labor shortage and will have trouble supporting this aging population through its state services.11


Finally, the policy led to the proliferation of undocumented, non-first-born children. Their status as undocumented makes it impossible to leave China legally, as they cannot register for a passport. They have no access to public education. Oftentimes, their parents were fined or removed from their jobs.5


One-Child Policy FAQs

Does China Still Have the One-Child Policy?


No. China reverted to a two-child policy after its one-child policy ended in 2015, and the restrictions were gradually loosened before its official end.3


Did China's One-Child Policy Increase Its Economic Growth?


There's a chicken or egg quality to any answer: China's one-child policy, by initially reducing population growth, could have contributed to economic gains by creating a larger working-age population relative to children, which would have boosted productivity and savings. However, it's also the case that countries with increases in national wealth tend to have population growth that slows down. Thus, the increase in economic growth in China may have helped reduce the number of Chinese newborns over this time, not the other way around. Whatever the case, the long-term effects of these demographic shifts from about 1979 to 2015 include a shrinking labor force and a greater proportion of the population that is retired, posing challenges for continued economic growth and the social safety net.


Is China Encouraging the Birthrate Today?


Yes. China has implemented or increased parental tax deductions, family leave, housing subsidies for families, and spending on reproductive health and child care services to increase the national birthrate since ending the one-child policy formally in 2015. The Chinese government also promotes flexible work hours and work-from-home options for parents. Most interesting are policies one wouldn't consider related to the birthrate at first glance, such as banning private tutoring companies from profiting off teaching core subjects during weekends or holidays. By lowering educational pressure on children and this often costly financial load on parents, China is attempting to lower the burdens of parenting. With greater financial security, parents may feel better able to handle additional children. Another upshot? By reducing pressure academically, especially on weekends and holidays, families can spend more time together, thus fostering greater family connections.


What Happened If You Broke the One-Child Policy?


Violators of China's one-child policy could be fined, forced to have abortions or sterilizations or lose their jobs.5


The Bottom Line


China's one-child policy, a phrase used for a set of laws related to population growth implemented starting in 1979, represented one of the more draconian modern attempts to intervene in a country's rising demographics. While the population did slow, the policy also resulted in unintended consequences, such as an aging population, gender imbalance, and a shrinking workforce. Its discontinuation in 2015 and subsequent measures to encourage higher birth rates reflect China's complex challenges in balancing population control with sustainable economic and social development.


ARTICLE SOURCES

Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.

  1. J.N. Wasserstrom. "China in the 21st Century: What Everyone Needs to Know." Oxford: Oxford University Press, 2018. Pages 81-84.

  2. Asia Pacific Foundation of Canada. "China’s One Child Policy." Page 1. 

  3. National Library of Medicine. "The Effects of China’s Universal Two-Child Policy."

  4. Library of Congress. "China’s One Child Policy."

  5. David Howden and Yang Zhou. “China’s One-Child Policy: Some Unintended Consequences.” Economic Affairs. 34/3. Pages 353-69.

  6. The World Bank. "Fertility Rate, Total (Births per Woman) - China."

  7. Pew Research Center. "Without One-child Policy, China Still Might Not See Baby Boom, Gender Balance."

  8. Gao, Fang., Li, Xia. "From One to Three: China’s Motherhood Dilemma and Obstacle to Gender Equality."Women. (2021.) Pages 252-266. 

  9. Population Reference Bureau. "What Can We Learn From the World’s Largest Population of Older People?"

  10. United Nations. "Revision of World Urbanization Prospects."

  11. World Health Organization. "Ageing and Health in China."




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