China Now Reaping the Whirlwind of Its Family Planning Commands

Feb..3, 2020
Bob Adelmann

God's complaint in Hosea didn't come close to the horror inflicted on the Chinese people by Mao Zedong's "Great Leap Forward." Said the Lord: "Israel's foolish plans are like planting the wind, but they will harvest a storm."

Mao's foolish plan was to turn China's agrarian society into a communist paradise by force, thinking it would miraculously propel his third world country into the 20th century. Instead, his insistence that all plots be managed by collectives, and private tending of gardens forbidden, cost the lives of some 45 million people through starvation. With Mao gone, his followers implemented a "two child policy" in order to help recover from what historians refer to as the greatest famine in all of human history.

That policy worked so well that by 1979 the communists reversed course, commanding that families implement a "one child" policy to rein in its population growth.

It didn't take long for that new policy to take effect. It worked so well that Chinese officials celebrated the news that 400 million births were prevented. Actual births prevented, including the families not created, approached a billion, according to more reliable outside sources.

It set in motion what Yuanj Xin, a demographer at Nankai University, told Financial Times "an irreversible trend."

The trend became obvious in 2017, the year after communist Chinese officials relaxed its "one child" policy and implemented some incentives for citizens to increase the size of their families. In 2016, 17.9 million babies were born in China. That number fell to 17.2 million the next year, dropping to 15.2 million in 2018 and then to 14.2 million last year.

When China's "fertility rate" is calculated, it is below the "replacement" rate of 2.1 births per woman at an official estimate of 1.6. Unofficial and more reliable estimates put the country's fertility rate at just over 1. In northeast China, the fertility index is 0.5, meaning that the next generation in that region will be a quarter the size of the last generation.

Estimates are that even if China can bring its fertility index back up to 1.2, its total population will fall from 1.4 billion to just one billion by 2050 and less than 500 million by the turn of the century. And that's a big if.

The New York Times said that the continuing drop in births "could have a seismic effect" in the years to come. The command economy has all but destroyed the traditional Chinese family's culture of taking care of its own. It has created what the Financial Times calls a demographic "time bomb," with the country facing vast and increasing shortages of labor for its manufacturing sector and negatively impinging on its ability to care for its old.

If you enjoy the information on, you're sure to enjoy the McAlvany Intelligence Advisor, as well. You can test drive it by signing up for the McAlvany Intel Memo. You'll receive key excerpts from MIA each week, and best of all you can do so for FREE. Just sign up here.

The problem is exacerbated by the fall in the number of women of child-bearing age, thanks to socialist family planning that began in 1979 when baby boys were preferred to girls. Said Yuan Xin of Nankai University, "We are facing a shortage of would-be mothers." There are currently an estimated 24 million single men of marrying age unable to find wives. And those who can find wives learn very quickly that those young women aren't interested in having children. Said Xin: "Young people's ideas of family and giving birth are changing, and traditional values such as sustaining family lineages through giving birth have been weakening."

China's population started shrinking two years ago, according to Yi Fuxian, an economist at Peking University, who called it "a historic turning point in China's population."

The impact is showing up in numerous places. Analysts at JPMorgan are predicting a further slowdown of China's economy, which they say "means that China will remain the second-largest economy much longer than expected." According to the latest World Population Prospects report from the UN, 27 countries now have fewer people today than they did just 10 years ago. That number is expected to grow to 55 over the next 10 years, and China will be near the top of the list.

China's working age population (ages 15 to 64) has shrunk for four straight years, while its "dependency rate" – the portion of nonworking people to total population – rose for the first time in more than 30 years in 2011 and is expected to continue rising. This is putting existential pressure on the country's retirement plans, with estimates they will run out of money in less than 15 years.

The country's GDP, already under pressure (with China expert Gordon Chang voicing the opinion on Fox News that it is already flat), will likely continue to decline. This will inhibit the communists' ability to continue to fund its Belt and Road Initiative, the "Venus fly trap" it has been using successfully to draw in its neighbors to become virtual vassals of the Chinese leadership.

The size of China's labor force is rapidly declining while it's getting older. As Yi Fuxian wrote in the South China Morning Post:

The younger a nation's population … the stronger its vitality … so in many ways the median age reflects economic vitality. China's median age was 22 in 1980. By 2018 it was 40. It will rise to 45 in 2030 and 56 in 2050….

We can say that the US economy will not be overtaken by China … China's economic vitality will continue to decline.

God is right: sow the wind and reap the whirlwind.


Sources: Hosea 8:7 New Century Version

Front Page: The Future Doesn't Belong to China

The New York Times: China's Birthrate Hits Historic Low, in Looming Crisis for Beijing

Financial Times: China's falling birth rate threatens economic growth

National Interest: Dangerous Demographics: China's Population Problem Will Eclipse Its Ambitions

The New York Times: China's Looming Crisis: A Shrinking Population

South China Morning Post: Worse than Japan: how China's looming demographic crisis will doom its economic dream

History of Mao's Great Leap Forward

History of the Great Chinese Famine caused by Mao's Great Leap Forward

China's One Child Policy

Add new comment

Plain text


McAlvany Weekly Commentary provides investors with valuable monetary, economic, geo-political and financial information that cannot be found on Wall Street. Your host David McAlvany presents a solid strategy of wealth preservation for your financial and retirement assets while living in an unstable economy.

Through its client focused, customized approach, MWM is committed to providing independent, well-researched, objective advice, and investment professionalism. At MWM, our client commitment is to preserve capital, manage risk, and grow your assets in an ever-changing global environment.

At International Collectors Associates (ICA), we specialize in the sale of bullion, semi-rare U.S. and European gold coins and secure offshore storage in Switzerland for your precious metals. Our highly trained and experienced advisors strive to help you in customizing solid strategies of wealth preservation for your financial and retirement assets.

McAlvany Financial Group

The McAlvany Financial Group has a contrarian, in-depth approach to its analysis, allowing the company to avoid decisions based on emotion, and thus combine maximum risk mitigation with consistent real growth for its clients’ investments. Integrity, attentiveness, and longevity have characterized the company’s client relationships since 1972.