The Central Bank of China (PBOC) document suggests the abolition of birth limits

BEIJING – China may be on the verge of abandoning its controversial birth control policy.

The central bank released a document Wednesday afternoon suggesting the country would remove limits on how many children people can have, suggesting China should “completely liberalize and encourage childbirth.”

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

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

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

The paper stated that the views of the authors do not represent that of the central bank. However, the call to remove birth restrictions marks the latest high-level discussion on how to tackle the aging Chinese population.

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

In two dedicated sections of the paper, researchers from the People’s Bank of China set out 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 United States in the last 40 years based on cheap labor and the bonus of a large population, what can it rely on in the next 30 years? Is it worth it?” think about it, ”the authors wrote in Chinese, according to a CNBC translation.

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

From 2019 to 2050, China’s population will decline by 2.2%, while that of the US will increase by 15%, according to the newspaper, which cites UN estimates.

The authors added that China’s workforce percentage 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 that of the US. However, by 2050, China’s workforce ratio will be 1.3 percentage points lower than the U.S., according to the newspaper.

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

Educational and technological advances are insufficient to counter the population decline, and China should remove restrictions on births, the authors wrote.

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

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

And once the older segment of the population starts selling properties, stocks and bonds to fund their retirement, the ratio will approach that of a labor force buying those assets, which could put pressure on them. greater on prices, according to the newspaper. .

The Chinese authorities are expected to publish the results of a ten-year census later this month.