the economy of china · stood without reference to developments that took place during the...

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The Economy of China

The Economy of China Centre for Financial and Management Studies

© SOAS University of London First published: 2015; Revised: 2016, 2019

All rights reserved. No part of this module material may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, including photocopying and recording, or in information storage or retrieval systems, without written permission from the Centre for Financial and Management Studies, SOAS University of London.


Module Introduction and Overview

Contents

1 Introduction to the Module 2

2 The Module Authors 2

3 Study Materials 3

4 Module Overview 4

5 Learning Outcomes 5

6 Assessment 6

Specimen Examination 13


2 University of London

1 Introduction to the Module

The Economy of China module is designed to introduce you to a wide variety of issues that are important for China’s present and future economic and social development. The choice of topics is intended to help throw light on the nature, rationale and impact of China’s post-1978 reform strategy. Neither this strategy nor its underlying policies can, however, be under-stood without reference to developments that took place during the post-1949 era under Mao Zedong. Accordingly, the discussion will give consider-ation to the pre-1978 background of more recent developments. Upon successful completion of this module, we hope that students with a variety of backgrounds will understand the major economic developments that have taken place in China since the introduction of reforms in 1978, the key challenges in China’s future economic and social trajectory, and her importance in the international and regional economies.

2 The Module Authors

Robert Ash is Professor of Economics with reference to China and Taiwan at SOAS, University of London, where he teaches in the Department of Eco-nomics and the Department of Financial and Management Studies. Since 1999 he has been Director of the SOAS Taiwan Studies Programme. He was previously Head of the Contemporary China Institute at SOAS and Coordi-nator and Director of the EU-China Academic Network – a major initiative to establish a community of interest among academics, government and professional bodies, and individuals working on China within EU Member States. Professor Ash has held visiting research and teaching positions at universities in Australia, Hong Kong, France, and Italy. He has written or edited 11 books on China, edited two on Taiwan two on Hong Kong. He is the author of more than 35 articles and book chapters, as well as of some 250 contributions to yearbooks and encyclopaedias, and other reports and shorter papers. Susanne Lingohr-Wolf holds a PhD from SOAS, University of London. She has lived in China, Hong Kong and Singapore and has previously taught the undergraduate and postgraduate module Economic Development of Modern China at SOAS. Her doctoral research focuses on rural household involve-ment in the post-harvest agro-economy in China. Her research interests include China’s agro-economy, rural development and rural livelihoods. She has published in the academic journal The China Quarterly. Dr Damian Tobin is a Lecturer in the Department for Financial and Man-agement Studies, SOAS, University of London, where he specialises in the Hong Kong's financial system, especially Chinese banks and their manage-ment, renminbi internationalisation, bank reform and monetary policy in China. He was the founding Academic Director of the MSc International Business Administration. Dr. Jing Bian obtained her PhD from SOAS, University of London. Her research interests include: the Chinese economy and finance, corporate

Introduction and Overview

Centre for Financial and Management Studies 3

governance, comparative law and financial regulation, economic crime, Chinese Law, and cross-border mergers and acquisitions. Dr Bian has worked on research projects for international institutions as well as interna-tional cross border commercial transactions. She has published widely in leading journals, in both Chinese and English. Her latest book is China’s Securities Market – Towards Efficient Regulation was published in January 2014 and she is editor of the forthcoming four volume Financial Regulation in China.

3 Study Materials

As with all CeFiMS modules, you will have received a study guide (these specially authored ‘units’), a Module Reader, a specimen examination paper to demonstrate the kinds of questions appropriate to a final examination and two assignments that will be marked by your module tutor.

Study Guide

In order to structure your learning, we have put together this study guide, consisting of eight units of work. Each unit should be studied within a week. It is designed in such a way that studying the unit and the associated core readings will require between 15 and 20 hours. The units will introduce the key topics, the core readings and assignments for the module. Frequent referral to learning outcomes and references back to issues studied earlier in the module, and the setting of study activities within the units, will help you follow the module and check your learning progress. Most of the data used in the study guide and our analysis of China’s economic and social developments is based on the official Chinese statistics from various years since 1978, as published by the National Bureau of Statistics (NBS), formerly known as the State Statistical Bureau (SSB). The data can be found, for instance, in the annual publications of the China Statistical Yearbook (in Chinese and English language) or the China Labour Statistics Yearbook (in Chinese).

Module Reader

In addition to this Study Guide you must read the assigned readings for the module. There is a rich and extensive literature in English on the modern economic development of China. There is, however, no single book that would cover all our topics discussed and that we could subsequently recommend as an appropriate comprehensive textbook for this module. In your Module Reader you will find a selection of academic articles and book chapters, which are assigned as core readings in the Study Guide. You are expected to read these articles as part of your study of this module. You may find that some articles and chapters have a wider range than the Study Guide, but they have been specifically chosen to present central arguments relevant to this module.



Optional Readings

In addition, the Study Guide makes reference to optional readings. These refer to sources (e.g. academic articles or book chapters) that are not required reading. These readings do not form part of the study material and will depend upon you having access to a reference library or their availability through the VLE. You will not be assessed on them in the examination or assignments, but you can choose to read them if you wish to further investigate particular topics. Although not mandatory, we think that you will enrich your study of this module by looking beyond the core readings. Indeed, you are encouraged to research information yourself and choose your own additional readings. You could do this through searching the Internet and by accessing online academic journals through the Library resources on the VLE.

4 Module Overview

This module consists of eight units, each with its own core text and set of readings, questions and exercises. There are also two assignments and you will have the opportunity to do some further thinking around the issues being discussed through various optional activities. In addition, you will be able to engage with your fellow students through the Virtual Learning Environment (VLE).

Unit 1 Demographic Challenges Facing China – Population Growth, the Changing Population Structure and Ageing

1.1 Introduction

1.2 An Introduction to Demographics

1.3 Demographic Trends in China since 1949

1.4 Population Policy in China since 1949

1.5 Structural Features of Population and Population Changes in China

1.6 Conclusion

Unit 2 The Employment Challenge

2.1 Introduction

2.2 Employment Structure and Trends – National and Regional Perspectives

2.3 Urban Employment

2.4 Rural Employment

2.5 Conclusion

Unit 3 China’s Food Security 3.1 Introduction

3.2 The Importance of Agriculture in China

3.3 China’s Food Security Viewed in the Global Context

3.4 Food Production in the Mao Era

3.5 Food Production in China since 1978

3.6 Food Consumption and the Challenge of Feeding the Chinese Population

3.7 China’s Foreign Trade in Grain

3.8 The Rationale of China’s Pursuit of Grain Self-Sufficiency

3.9 Concluding Remarks



Unit 4 Energy Security – Meeting China’s Energy Needs in the Twenty-First Century

4.1 Introduction to Unit 4

4.2 The Energy Sector in China before 1949

4.3 China’s Energy Sector during the Mao Era

4.4 China’s Energy Sector under the Impact of Reform

4.5 New Forms of Energy

4.6 Conclusion

Unit 5 The Sustainability of China’s Economic Growth 5.1 Introduction

5.2 The Origins of Environmental Degradation in China

5.3 Environmental Degradation in China Today

5.4 Pressures on Natural Resources

5.5 Emissions and Energy Efficiency – a Brief Comment

5.6 The Legal and Institutional Dimensions of Environmental Protection

5.7 Conclusion

Unit 6 Reform and Development in China’s Financial Sector

6.1 Achievements in Institution-Building and Reform

6.2 Challenges Faced by the Banking Sector

6.3 WTO Membership and the Bank System

6.4 RMB Internationalisation

6.5 Conclusion

Unit 7 Capital Market Development in China 7.1 China’s Capital Market Development

7.2 Key Features of China’s Equity Market Reform

7.3 From One-third to Two-thirds Privatisation

7.4 International Listing of Chinese Corporations

7.5 Concluding Remarks

Unit 8 Trends and Prospects 8.1 Introduction

8.2 Does the Chinese Economy Matter?

8.3 Historical Resonances

8.4 The Ideological Dimension of Economic Debate in China

8.5 Economic Freedom

8.6 Future Developments

5 Learning Outcomes

When you have completed your study of this module you will be able to: • discuss China’s demographic development and challenges since the

1950s, including the economic and social impact of population change • critically evaluate developments in post-1978 urban and rural labour

markets



• explain the importance that lies with agriculture – and, more generally, the rural sector – in China

• identify the difficulties as well as future challenges faced by China’s energy sector, with special reference to the coal and oil sectors

• evaluate China’s environmental problems and the current framework for dealing with such pressures

• discuss improvements in living standards since the pre-1949 period • outline reforms and developments in China’s Capital Markets and

Financial sectors • interpret the importance of the Chinese economy, both in the

perception of China’s population and the people outside China.

6 Assessment

Your performance on each module is assessed through two written assign-ments and one examination. The assignments are written after Unit 4 and Unit 8 of the module session. Please see the VLE for submission deadlines. The examination is taken at a local examination centre in September/October.

Preparing for assignments and exams

There is good advice on preparing for assignments and exams and writing them in Chapter 8 of Studying at a Distance by Christine Talbot. We recom-mend that you follow this advice. The examinations you will sit are designed to evaluate your knowledge and skills in the subjects you have studied: they are not designed to trick you. If you have studied the module thoroughly, you will pass the exam.

Understanding assessment questions

Examination and assignment questions are set to test your knowledge and skills. Sometimes a question will contain more than one part, each part testing a different aspect of your skills and knowledge. You need to spot the key words to know what is being asked of you. Here we categorise the types of things that are asked for in assignments and exams, and the words used. All the examples are from the Centre for Financial and Management Studies examination papers and assignment questions.

Definitions

Some questions mainly require you to show that you have learned some concepts, by

setting out their precise meanings. Such questions are likely to be preliminary and be

supplemented by more analytical questions. Generally, ‘Pass marks’ are awarded if the

answer only contains definitions. They will contain words such as:

Describe Contrast

Define Write notes on

Examine Outline

Distinguish between What is meant by

Compare List



Reasoning

Other questions are designed to test your reasoning, by explaining cause and effect.

Convincing explanations generally carry additional marks to basic definitions. They will

include words such as:

Interpret

Explain

What conditions influence

What are the consequences of

What are the implications of

Judgement

Others ask you to make a judgement, perhaps of a policy or of a course of action. They

will include words like:

Evaluate

Critically examine

Assess

Do you agree that

To what extent does

Calculation

Sometimes, you are asked to make a calculation, using a specified technique, where the

question begins:

Use indifference curve analysis to

Using any economic model you know

Calculate the standard deviation

Test whether

It is most likely that questions that ask you to make a calculation will also ask for an

application of the result, or an interpretation.

Advice

Other questions ask you to provide advice in a particular situation. This applies to law

questions and to policy papers where advice is asked in relation to a policy problem. Your

advice should be based on relevant law, principles and evidence of what actions are

likely to be effective. The questions may begin:

Advise

Provide advice on

Explain how you would advise

Critique

In many cases the question will include the word ‘critically’. This means that you are

expected to look at the question from at least two points of view, offering a critique of

each view and your judgement. You are expected to be critical of what you have read.

The questions may begin:

Critically analyse

Critically consider

Critically assess

Critically discuss the argument that



Examine by argument

Questions that begin with ‘discuss’ are similar – they ask you to examine by argument, to

debate and give reasons for and against a variety of options, for example

Discuss the advantages and disadvantages of

Discuss this statement

Discuss the view that

Discuss the arguments and debates concerning

The grading scheme: Assignments

The assignment questions contain fairly detailed guidance about what is required. All assignments are marked using marking guidelines. When you receive your grade it is accompanied by comments on your paper, including advice about how you might improve, and any clarifications about matters you may not have understood. These comments are designed to help you master the subject and to improve your skills as you progress through your programme.

Postgraduate assignment marking criteria

The marking criteria for your programme draws upon these minimum core criteria, which are applicable to the assessment of all assignments:

• understanding of the subject • utilisation of proper academic [or other] style (e.g. citation of

references, or use of proper legal style for court reports, etc.) • relevance of material selected and of the arguments proposed • planning and organisation • logical coherence • critical evaluation • comprehensiveness of research • evidence of synthesis • innovation/creativity/originality.

The language used must be of a sufficient standard to permit assessment of these. The guidelines below reflect the standards of work expected at postgraduate level. All assessed work is marked by your Tutor or a member of academic staff, and a sample is then moderated by another member of academic staff. Any assignment may be made available to the external examiner(s).

80+ (Distinction). A mark of 80+ will fulfil the following criteria:

• very significant ability to plan, organise and execute independently a research project or coursework assignment

• very significant ability to evaluate literature and theory critically and make informed judgements

• very high levels of creativity, originality and independence of thought • very significant ability to evaluate critically existing methodologies and

suggest new approaches to current research or professional practice



• very significant ability to analyse data critically • outstanding levels of accuracy, technical competence, organisation,

expression.

70–79 (Distinction). A mark in the range 70–79 will fulfil the following criteria:

• significant ability to plan, organise and execute independently a research project or coursework assignment

• clear evidence of wide and relevant reading, referencing and an engagement with the conceptual issues

• capacity to develop a sophisticated and intelligent argument • rigorous use and a sophisticated understanding of relevant source

materials, balancing appropriately between factual detail and key theoretical issues. Materials are evaluated directly and their assumptions and arguments challenged and/or appraised

• correct referencing • significant ability to analyse data critically • original thinking and a willingness to take risks.

60–69 (Merit). A mark in the 60–69 range will fulfil the following criteria:

• ability to plan, organise and execute independently a research project or coursework assignment

• strong evidence of critical insight and thinking • a detailed understanding of the major factual and/or theoretical issues

and directly engages with the relevant literature on the topic • clear evidence of planning and appropriate choice of sources and

methodology with correct referencing • ability to analyse data critically • capacity to develop a focussed and clear argument and articulate

clearly and convincingly a sustained train of logical thought.

50–59 (Pass). A mark in the range 50–59 will fulfil the following criteria: • ability to plan, organise and execute a research project or coursework

assignment • a reasonable understanding of the major factual and/or theoretical

issues involved • evidence of some knowledge of the literature with correct referencing • ability to analyse data • examples of a clear train of thought or argument • the text is introduced and concludes appropriately.

40–49 (Fail). A Fail will be awarded in cases in which there is: • limited ability to plan, organise and execute a research project or

coursework assignment • some awareness and understanding of the literature and of factual or

theoretical issues, but with little development • limited ability to analyse data • incomplete referencing • limited ability to present a clear and coherent argument.



20–39 (Fail). A Fail will be awarded in cases in which there is:

• very limited ability to plan, organise and execute a research project or coursework assignment

• failure to develop a coherent argument that relates to the research project or assignment

• no engagement with the relevant literature or demonstrable knowledge of the key issues

• incomplete referencing • clear conceptual or factual errors or misunderstandings • only fragmentary evidence of critical thought or data analysis.

0–19 (Fail). A Fail will be awarded in cases in which there is:

• no demonstrable ability to plan, organise and execute a research project or coursework assignment

• little or no knowledge or understanding related to the research project or assignment

• little or no knowledge of the relevant literature • major errors in referencing • no evidence of critical thought or data analysis • incoherent argument.

The grading scheme: Examinations

The written examinations are ‘unseen’ (you will only see the paper in the exam centre) and written by hand, over a three-hour period. We advise that you practise writing exams in these conditions as part of your examination preparation, as it is not something you would normally do. You are not allowed to take in books or notes to the exam room. This means that you need to revise thoroughly in preparation for each exam. This is especially important if you have completed the module in the early part of the year, or in a previous year. Details of the general definitions of what is expected in order to obtain a particular grade are shown below. These guidelines take account of the fact that examination conditions are less conducive to polished work than the conditions in which you write your assignments. Note that as the criteria of each grade rises, it accumulates the elements of the grade below. Assign-ments awarded better marks will therefore have become comprehensive in both their depth of core skills and advanced skills.

Postgraduate unseen written examinations marking criteria

80+ (Distinction). A mark of 80+ will fulfil the following criteria:

• very significant ability to evaluate literature and theory critically and make informed judgements

• very high levels of creativity, originality and independence of thought • outstanding levels of accuracy, technical competence, organisation,

expression • outstanding ability of synthesis under exam pressure.



70–79 (Distinction). A mark in the 70–79 range will fulfil the following criteria:

• clear evidence of wide and relevant reading and an engagement with the conceptual issues

• develops a sophisticated and intelligent argument • rigorous use and a sophisticated understanding of relevant source

materials, balancing appropriately between factual detail and key theoretical issues

• direct evaluation of materials and their assumptions and arguments challenged and/or appraised;

• original thinking and a willingness to take risks • significant ability of synthesis under exam pressure.

60–69 (Merit). A mark in the 60–69 range will fulfil the following criteria:

• strong evidence of critical insight and critical thinking • a detailed understanding of the major factual and/or theoretical issues

and directly engages with the relevant literature on the topic • develops a focussed and clear argument and articulates clearly and

convincingly a sustained train of logical thought • clear evidence of planning and appropriate choice of sources and

methodology, and ability of synthesis under exam pressure.

50–59 (Pass). A mark in the 50–59 range will fulfil the following criteria:

• a reasonable understanding of the major factual and/or theoretical issues involved

• evidence of planning and selection from appropriate sources • some demonstrable knowledge of the literature • the text shows, in places, examples of a clear train of thought or

argument • the text is introduced and concludes appropriately.

40–49 (Fail). A Fail will be awarded in cases in which:

• there is some awareness and understanding of the factual or theoretical issues, but with little development

• misunderstandings are evident • there is some evidence of planning, although irrelevant/unrelated

material or arguments are included.

20–39 (Fail). A Fail will be awarded in cases which:

• fail to answer the question or to develop an argument that relates to the question set

• do not engage with the relevant literature or demonstrate a knowledge of the key issues

• contain clear conceptual or factual errors or misunderstandings.

0–19 (Fail). A Fail will be awarded in cases which:

• show no knowledge or understanding related to the question set • show no evidence of critical thought or analysis • contain short answers and incoherent argument.

[2015–16: Learning & Teaching Quality Committee]



Specimen exam papers

CeFiMS does not provide past papers or model answers to papers. Modules are continuously updated, and past papers will not be a reliable guide to current and future examinations. The specimen exam paper is designed to be relevant and to reflect the exam that will be set on this module. Your final examination will have the same structure and style and the range of question will be comparable to those in the Specimen Exam. The number of questions will be the same, but the wording and the requirements of each question will be different. Good luck on your final examination.

Further information

Online you will find documentation and information on each year’s examina-tion registration and administration process. If you still have questions, both academics and administrators are available to answer queries. The Regulations are also available at www.cefims.ac.uk/regulations/, setting out the rules by which exams are governed.

DO NOT REMOVE THE QUESTION PAPER FROM THE EXAMINATION HALL

UNIVERSITY OF LONDON

CENTRE FOR FINANCIAL AND MANAGEMENT STUDIES

MSc Examination for External Students

91DFMC377

INTERNATIONAL BUSINESS ADMINISTRATION


Specimen Examination

This is a specimen examination paper designed to show you the type of examination you will have at the end of the year for The Economy of China. The number of questions and the structure of the examination will be the same but the wording and the requirements of each question will be different. Best wishes for success on your final examination. The examination must be completed in THREE hours. You must answer THREE questions. The examiners give equal weight to each question; therefore, you are advised to distribute your time approximately equally between three questions.

PLEASE TURN OVER



Answer THREE questions. 1. What have been the economic and social impact of population

change in China in the last half century? 2. Critically evaluate developments in post-1978 urban and rural

labour markets. 3. What is the economic significance of the rural sector in China? 4. What are the main challenges faced by China’s energy sector,

including non-carbon energy? 5. Evaluate China’s environmental problems and the current

framework for dealing with them. 6. To what extent have living standards improved in China since

1978? 7. Discuss the main reforms and developments in China’s

Capital Markets and Financial sectors. 8. How important is the Chinese economy, both in the

perception of China’s population and the people outside China?

[END OF EXAMINATION]


Unit 1 Demographic Challenges Facing China – Population Growth, the Changing Population Structure and Ageing

Contents

Unit Overview 2

1.1 Introduction 3

1.2 An Introduction to Demographics 3

1.3 Demographic Trends in China since 1949 7

1.4 Population Policy in China since 1949 10

1.5 Structural Features of Population and

Population Changes in China 18

1.6 Conclusion 23

References 24



Unit Overview

In Unit 1 you will be introduced to China’s population growth, structure and policies, all of which have critical economic, but also social and political, implications. In order to provide you with the necessary theoretical back-ground, we will first discuss some of the most widely used concepts and ideas in the study of demographics. Thereafter, you will study the changing demographic profile of China and consider the Chinese government’s policies towards population since 1949. The last section of the unit will highlight some structural features of China’s population that are concealed within the estimates of total population – for example, its regional distribu-tion across regions and sectors, its age structure and sex ratio.

Learning outcomes

When you have completed your study of this unit and its readings, you will be able to:

• interpret demographic data relating to China since the 1950s • identify the changing nature of China’s demographic problems since

1949 • discuss the Chinese government’s changing policies towards

population • assess the impact of economic reforms and population policies on

population size, structure and rate of change • explain the economic and social impact of population change in China • discuss important structural features of China’s population, such as its

distribution, age structure and sex ratio • outline the population challenges faced by China in the coming decades.

Reading for Unit 1

Module Reader

Thomas Scharping (2003) ‘Motives and goals of Chinese birth control’. Birth Control in China, 1949–2000. London and New York: RoutledgeCurzon. pp. 29–42. Tian Xueyuan (1994) ‘Population problems under market conditions’. Translated from the Chinese in Howe, Kueh and Ash (2003) China’s Economic Reform: A Study with Documents. London and New York: RoutledgeCurzon. pp. 302–13. Li Yongping and Xizhe Peng (2000) ‘Age and sex structures’. In: Xizhe Peng and Guo Zhigang (Eds.) The Changing Population of China. Oxford UK: Blackwell. pp. 64–76. Judith Banister (2002) ‘Population growth in China and its economic implications’. In: Robert Ash (Ed.) China's Integration in Asia: Economic Security and Strategic Issues. Richmond UK: Curzon Press. pp. 60–73. Xizhe Peng (2009) ‘Demographic factors in China’s economic growth’. In: Nazrul Islam (Ed.). Resurgent China: Issues for the Future. Basingstoke UK: Palgrave Macmillan. pp. 52–71.

Unit 1 Demographic Challenges Facing China


1.1 Introduction

The size, structure and rate of change of a country’s population have critical economic implications, but also affect social and political stability. This is true for every country, but it has special relevance to developing countries, where population growth is likely to be rapid. The statement has very particular meaning for those developing countries with huge populations, such as Brazil, Indonesia, India and China. With about one-fifth of global population, China is the world’s most popu-lous country. Its peak rate of population growth was reached in the mid-1960s, thereby adding to the existing population approximately 19–24 million people per year. That rate has since been reduced to well under 1 per cent, with major consequences, as we will discuss below. In 2012, when China’s population officially grew by less than 0.5 per cent, some 6.69 million people were added to existing numbers. In 2013, some 6.68 million were added. As you can imagine, even though the challenge posed by population growth has been very significantly reduced, the challenge of meeting the needs of these additional numbers is not to be under-estimated. The economic implications of population growth are perhaps most obvious-ly captured in its impact on employment, and on the distribution of national income between productive and non-productive activities. A faster-growing population needs more resources in order to feed, house, clothe, provide medical care for and educate new additions to the population. The larger this allocation, the smaller the surplus that is available for developmental purposes, such as investing in new factories, installing plant and machinery and creating infrastructure. In China, until relatively recently, growth rates of food production, agriculture and the economy were not much higher than population growth, so that the effect of population growth was strongly felt. In this unit, we will first provide a short introduction to demographics (Section 1.2), before proceeding with our analysis of China’s demographic trends (Section 1.3) and population policy since 1949 (Section 1.4). The unit concludes by pointing out some important structural features that are concealed in the demographic profile (Section 1.5).

1.2 An Introduction to Demographics

Before analysing China’s population trends and policies, we must introduce some basic demographic terms and definitions. The first subsection will therefore explain the following terms: population size, structure and growth rate, crude death and birth rates, age-specific and total fertility rates, vital rates and rate of natural increase, migration, age structure, dependency ratio and demographic investment. The second subsection will discuss the effect of population growth on aggregate supply and demand. The last subsection will introduce a major theoretical idea in social demography – that is, the theory of demographic transition.



Please be aware that throughout subsection 1.2 a large number of definition-al terms will be covered. You might find it helpful to note these as reference for the study of the second half of the unit.

1.2.1 Demographic terms and definitions

When we speak of population size, we refer to the number of people that constitute the population at a given time (usually the end of a year, though sometimes it may refer to the year’s mid-point). Population structure refers to some aspect of a country’s demographic profile (e.g. geographical or sectoral distribution, or its distribution in terms of age or of sex). The growth rate of a population is a measure of the speed with which that population is changing – usually rising – per period of time (that is, usually per year). This growth rate can be expressed in percentage terms, although it is conventionally expressed per thousand. Population growth reflects the behaviour of three demographic variables: mortality, fertility and migration. Mortality is often equated with the crude death rate (CDR), which measures the total number of deaths per period of time (most commonly, one year) divided by total population at the mid-point of that period. (For example, China’s crude death rate in 2012 was 7.15 per thousand.) Mortality rates follow a distinctive pattern. They are often characterised by a relatively high incidence of death among the very young (hence, concerns about infant mortality), followed by a sharp fall to a low incidence among young age groups, which, however, eventually starts to rise among the elderly. Fertility is regarded the single most important determinant of population change. It is correlated with a number of factors such as societal values, age of marriage, female literacy and childhood mortality. Fertility is often equated with the crude birth rate (CBR) – that is, the total number of live births per time period (usually a year) divided by total population, counted at the mid-point of that period. This measure is called the ‘crude’ birth rate, because it averages the birth rate across the entire population, regardless of age or sex. In China in 2012 the crude birth rate was 12.1 per thousand – almost half of the peak post-1978 level of 23.3, reached in 1987. The basic and most frequently used index of fertility is the age-specific fertility rate (ASFR). This is a basic fertility index, which relates the number of live births among women of a given age group to the total number of women of that age range. The second most popular index of fertility, called the total fertility rate (TFR), can be derived from the ASFR. It measures the average number of children (live births) born to a woman of child-bearing age (usually reckoned to be from 15 to 49 years of age). As long as the children survive, higher fertility rates translate into higher rates of population growth and a higher share of children in total population. Birth rates and death rates are known as vital rates. The difference between them (that is, crude birth rate minus crude death rate) is known as the rate of natural increase. It measures the speed of changes in population size due to the difference between the number of births and of deaths. This rate of natural increase is the most common measure of population growth.



Note, however, that this rate does not include the effects of migration –population movements into and out of the country. When migration is included, the rate refers to total change in population size. But bear in mind that it is not only international migration that can have a significant demo-graphic impact, but also internal migration. Suffice to say here that since the 1980s internal rural-to-urban migration has become a defining characteristic of demographic change in China. Official figures indicate that at the end of 2013 China’s migrant population numbered almost 245 million people, or 18 per cent of total population. To speak only of the importance of mortality, fertility and migration for population growth neglects the effects of age structure. The age structure is an important population attribute, which shows the shares of various age groups within the total population. A population with a young age structure contains a built-in momentum for future population increase. In China, a surge in population growth in the mid-1960s generated large numbers of young people of marriageable age twenty or so years later, making it diffi-cult to hold down the crude birth rate in the second half of the 1980s. This highlights the important point that even with strict birth control measures, fertility will not quickly drop to replacement level – the level at which a woman will, on average, be succeeded by one or less than one daughter (and a man by one or less than one son). Remember too that even when fertility does start to fall, population will continue to expand, perhaps for a further 50 years or more. This too is important, for it suggests that when they come to formulate their policies, officials must take a long-term view of the relationship between population size and resources. In terms of feeding, clothing, housing, providing health and other forms of care, it is not only the young but also the old who make heavy demands. Hence, the importance of the dependency ratio, which is defined as the popu-lation below the age of 15 (or the minimum official age at which people can undertake paid work) and above the age of retirement (say, 65) to those of working age (15–64). The more dependent young and old people there are in a population, the more resources have to be used to provide them with those basic necessities (that is, the higher will be demographic investment). As a result, the surplus available to the state for investment in infrastructure, agriculture, and industrial plant and machinery is constrained, thereby limiting the pace of economic growth.

1.2.2 Population growth and its effect on aggregate supply and demand

Population growth affects both an economy’s aggregate supply as well as its demand. In terms of aggregate supply (the productive capacity of an econo-my), population growth makes more people available to work and to produce an output. This principle reflects a lagged response at work: at any given time, the number of new entrants to the labour force reflects past vital rates. For example, high birth and death rates in China in the 1930s and 1940s meant that there were correspondingly fewer people looking for jobs in the 1950s. In contrast, the fall in death rate and rise in birth rate in the



1950s had the opposite effect, when the number of people reaching working age began to rise sharply in the late 1960s and the 1970s. Furthermore, population growth affects patterns of demand – and so invest-ment. Income distribution is also an important determinant, although a reasonable generalisation is that in societies with low levels of per capita income, more is likely to be spent on consumption than on investment. As for the pattern of consumption, the lower the level of per capita income, the more will be spent on food than on, say, manufactured goods. Not until a certain threshold income has been reached will food requirements be satisfied – quantitatively and qualitatively – enabling consumer spending to shift towards manufactured goods. China’s current situation in this respect is complicated. In the urban sector and richer parts of the countryside, spending on food has been falling quite sharply for some time, while purchases of manufactured goods (including consumer durables) and services have been rising. But elsewhere in China – especially in the countryside of the interior provinces – consumption patterns are much closer to those of poorer countries, with the share of household expenditure on food remaining correspondingly higher. There is also a more subtle point that has extremely important implications for growth. The faster population grows, the more investment is needed simply to maintain the existing average level of capital per member of the work force. This has implications for worker productivity, since demands for capital widening (that is, keeping per-worker availability of capital constant) rather than for capital deepening (that is, making available more capital per worker, on the basis of which improvements in labour productiv-ity can more readily take place) may inhibit rises in output per man-hour and so constrain growth. In a developing country, half or even two-thirds of total investment may be used simply to keep up with the labour force growth – that is, to ‘stand still’ (Crook, 1997: 198).

1.2.3 The theory of demographic transition

The theory of demographic transition is the most important theoretical idea in social demography. It was developed in 1929 by the American demogra-pher, Warren Thompson. Having observed changes in birth and death rates in industrialised societies, Thompson devised a simple, but powerful, theory. It states that as economic and social development proceeds, the mortality and fertility of a country’s population typically both decline, sequentially, from high to low levels. You should be able to identify this from Figure 1.1 below. The starting point is the pre-modern, pre-industrial stage, in which high fertility commonly combines with high mortality to generate slow population growth. The end-point is the post-transition, post industrial, stage, when low fertility and mortality rates generate a low rate of natural increase, implying that the absolute size and rate of growth of population have stabilised. Demographic transition itself describes the process of accelerated population growth that occurs between the initial and final stages. As you can see from the figure, the underlying reason for such population growth during the urbanis-



ing/industrialising and the mature industrial stages lies in improvements in mortality generally preceding a corresponding fall in fertility.

Figure 1.1 The Demographic Transition Model

Source: Montgomery (2001)

There are different views about how, most effectively, to reduce fertility and hasten demographic transition. Some argue that development itself is the most effective contraceptive – take care of the people by giving them a higher living standard, and population will take care of itself.1 But much empirical evidence supports an alternative thesis, which suggests that post-war fertility declines in developing countries have stemmed largely from deliberate efforts to control fertility through education, propaganda and organised family-planning policies, based on the use of modern contraception. Certainly, official Chinese policies to reduce population growth reflect the combined process of fertility decline and a shift to deliberate fertility control.

1.3 Demographic Trends in China since 1949

First, a word of caution is required as to the quality of China’s demographic data. Data problems have been a major source of difficulty for scholars seeking to analyse Chinese demographic trends. The quality has improved greatly since 1949, especially since the early 1980s. The training of data collectors and statisticians, as well as the design of population censuses and surveys, has improved. Nevertheless, the task of estimating China’s entire population remains enormous. The most recent (that is, the Sixth) National Census was undertaken on 1 November 2010. Ten million investigators were deputed to visit every household in towns and townships throughout the country to make on-the-spot registrations. As you can imagine, many problems were encountered. Quite apart from temptations by parents to

1 The idea behind this is that those with higher incomes would not have to rely on children

to provide for them in their retirement.



conceal births, or by officials to falsify data in order to show a ‘better’ result, it has also become much harder to track population changes. Many tens of millions of migrants are moving around China as a result of the weakening of formerly strict household registration controls. A consensus view is that official Chinese population statistics conceal a significant downward bias – that is, that population is in fact greater than it seems. Table 1.1 shows China’s total population in selected years between 1949 and 2013, and Table 1.2 presents the average rates of natural increase that these figures imply. The data for both tables is from China, National Bureau of Statistics.

Table 1.1 Estimates of China’s total population (1949–2013, selected years)

Year Total population (million)

Year Total population (million)

1949 542 1990 1,143

1952 575 1995 1,211

1953 588 2000 1,267

1957 647 2003 1,292

1958 660 2004 1,300

1961 659 2005 1,308

1962 673 2006 1,314

1964 705 2007 1,321

1965 725 2008 1,328

1970 830 2009 1,335

1972 872 2010 1,341

1975 924 2011 1,347

1980 987 2012 1,354

1982 1,017 2013 1,360

1985 1,059

Data from China, National Bureau of Statistics

As you can see, population growth since 1949 has not followed a consistent path. Based on the figures provided in the tables, can you identify two distinct periods between 1949 and 2012? What do the data tell you about population growth in each period? In the first period, from the early 1950s to the early 1970s, China’s popula-tion growth was rapid, averaging over 2 per cent per annum. As a result, total population increased from 542 million (1949) to 872 million in 1972. An exception to this trend is the major interruption associated with the Great Leap Forward (1958–62).



Table 1.2 Average annual rate of population growth in China (selected periods, 1949–2013).

Year Rate of increase (% p.a.) Year Rate of increase (% p.a.)

1949–72 2.09 1973–77 1.5

1949–53 2.0 1978–85 1.2

1953–57 2.4 1985–90 1.6

1958–62 0.8 1990–95 1.2

1963–65 2.5 1995–2005 0.8

1966–72 2.6 2005–13 0.5

1972–2013 1.09

Data from China, National Bureau of Statistics

Box 1.1 The Great Leap Forward (GLF) 1958–1960

Mao’s impatience with the pace of growth and his belief that a more indigenous strategy

would suit Chinese conditions better than the Soviet model led, in 1958, to the launch of

the GLF. More a vision than a plan, its rationale was that of a policy of technological

dualism (‘walking on two legs’). Budgetary investment would continue to be concentrated

on industry (the modern leg) in order to maintain the momentum of heavy industrial

growth. Meanwhile, unprecedented mass mobilisation of the supposedly under-utilised

rural labour force (facilitated by the integration of all farmers into large-scale communes)

would promote more rapid agricultural growth (the traditional leg) and support industry

through the establishment of rural factories (especially backyard steel furnaces).

The GLF strategy, however, turned out to be a disaster. It led to a catastrophic humani-

tarian and economic crisis (1960–1961), during which between 30 and 45 million people

died from starvation (or associated diseases) – the worst man-made disaster in human

history. Its origins lay in economic mismanagement of agriculture, a breakdown of the

statistical reporting system and the raising of economic targets to increasingly absurd

levels as part of Mao’s vision of the potential of the GLF.

By contrast, in the second period (that is, from the early 1970s until the present day), there has been unprecedented success by the government in limiting population growth. In less than two decades (between 1966–72 and 1978–85), the rate of natural increase was more than halved. Indeed, the evidence suggests that by the end of the twentieth century, China had completed its demographic transition. Although not literally unprece-dented in modern times – South Korea and Taiwan both recorded equally spectacular declines in population growth in a short period of time – the Chinese achievement is remarkable, bearing in mind the sheer size of its population. Having identified two distinct periods in the data, a number of important structural features that are concealed within these figures will be addressed later on in this unit.



1.4 Population Policy in China since 1949

The pattern of demographic change shown above was not accidental, but it reflects the impact of the Chinese government’s policies towards population during the same time. In the following we will review these population policies and their effects on demographic change since 1949.

1.4.1 From 1949 to the early 1970s

Your first reading, from a book by Thomas Scharping, will give you a good insight into

• the Chinese government’s attitude towards population growth from 1949 onwards

• the motives behind China’s population policy • the population targets that were formulated • how those motives and targets changed since the establishment of the

People’s Republic of China in 1949.

Reading

Please stop now and read pages 29–32 and 38–39 of the chapter by Scharping.

Make sure your notes enable you to explain the government’s political attitude

towards population growth between 1949 and the early 1970s. This will help you to fully

grasp the following discussion. By doing so, you will also achieve a major learning

outcome – that is, the ability to discuss the Chinese government’s changing policies

towards population.

Before 1949, China’s population change reflected conditions typical of a poor country: its crude death rate was about 25 per thousand, its infant mortality rate was some 20 per thousand, and life expectancy at birth was a mere 35 years. After 1949, under the impact of the establishment of a strong govern-ment capable of implementing simple, but effective, improvements in basic health and hygiene, the crude death rate fell sharply (from 20 to 10.8 per thousand during 1949–1957). At the same time, the crude birth rate increased significantly, and by 1957 the total fertility rate had reached 6.2. If you look carefully at Table 1.2, you should be able to identify the impact of this on the annual rate of natural increase, as it surged to well over 2 per cent. In part, the maintenance of a high and rising birth rate reflected China's young age structure and a high share of fertile females of childbearing ages in its population. But population was an ideological issue and the failure to control rapid population growth also reflected a ‘pro-natalist’ policy – that is, a policy that favoured more, not fewer, births. A powerful anti-Malthusian sentiment informed official attitudes towards population. It was articulated in Mao Zedong’s view that China could deal with a population many times its exist-ing size. In September 1949, just before the official establishment of the People’s Republic of China, Mao made the following remark:

Scharping (2003)

‘Motives and goals of

Chinese birth control’.

Birth Control in China, 1949–2000.

Reproduced in the

Module Reader. pp. 29–32; 38–39



It is a very good thing that China has a big population. Even if China’s population multiplies many times, she is fully capable of finding a solution…Of all the things in the world, people are the most precious. Under the leadership of the Communist Party, as long as there are people, every kind of miracle can be performed … 2

Those who argued otherwise – one famous demographer who did so was Ma Yin-Chu – were attacked as ‘neo-Malthusian … rightists’. By 1957 not only were the views of anti-natalists condemned, but so too was the entire profession of demography. Thus, it is no coincidence that the First Five-Year Plan (1953–57) document contained no discussion of population issues.

Study Note

‘Malthusian’

The Malthusian principle refers to a thesis by an English demographer, Thomas Robert

Malthus, who in 1798 anonymously published his Essay on the Principle of Population, as it Affects the Future Improvement of Society. Contained in this essay was the famous

thesis, which stated that the reproductive capacity of human beings would inevitably

place continuous pressure on the ‘means of subsistence’. Since land does not breed,

unlike people, the potential for population to increase exponentially was considered to

inevitably and inexorably put continuous pressure on food supplies.

By the late 1950s, in conjunction with the Great Leap Forward, a demographic catastrophe set in. (Looking at Table 1.2, you should be able to assess the impact on the rate of natural increase.) The origins of this catastrophe lie in a sharp fall in grain output (1959–61), the effects of which were exacerbated by procurement policies that made no allowance for the decline because of the government’s ignorance of the true situation. As per capita output fell below subsistence level, China’s population suffered famine and deaths from malnutrition, disease and starvation on a huge scale. During these famine years, Sichuan alone suffered six million ‘excess deaths’, while five other provinces – Anhui, Henan, Hunan, Shandong and Guizhou – each suffered over one million deaths. By contrast, to take just two examples, in Jiangxi and Zhejiang, there were fewer than 250,000 deaths during the same period; and some parts of the northeast were the recipients of large-scale in-migration from severely affected regions. Meanwhile, the urban sector emerged almost entirely unscathed, although here too food availability did decline. Table 1.3 illustrates birth and death rates, as well as the natural increase, during and after the Great Leap Forward. As you can see from the data, the death rate increased dramatically, especially in 1960. The dramatic rise in the death rate probably owes most to high infant mortality rates during the famine years. The number of ‘excess deaths’ refers to the deaths of people that are unexplained by previous or later trends. Official data show that between 1959 and 1961, some 71.63 million people died in China, whereas if the previous trend-line had been maintained, the expected figure would have been 41.5 million deaths. The difference – some 30 million – is therefore

2 Quoted in Judith Shapiro (2001: 31).



the demographer’s measure of deaths that can be attributed to the effects of the Great Leap Forward. But even this is not the entire story. In addition to death from starvation, many other problems affect a population that is profoundly malnourished. One of these affects young women and is called the ‘amenorrhea of hunger’ – that is, the failure to menstruate by women of childbearing age, so pre-venting them from conceiving. So not only did the Great Leap Forward generate an enormous number of excess deaths, but it also gave rise to a birth deficit. Some 74.99 million children were born during 1958–61, com-pared with an expected 106.72 millions (on the basis of previous trends) – a deficit of some 31 millions. Thus, the overall demographic gap attributable to the Great Leap amounts to approximately 61 million people. Following the Great Leap, the data in Table 1.3 illustrate a phenomenon that has been widely observed after a major famine – that is, the tendency for a sharp surge in births to combine with reduced mortality to generate acceler-ated population growth. Clearly, this is precisely what happened in China after 1961.

Table 1.3 Vital rates during and after the Great Leap Forward

Year Birth rate Death rate Natural increase

1958 29.22 11.98 17.24

1959 24.78 14.59 10.19

1960 20.86 25.4 −4.57

1961 18.02 14.24 3.78

1962 37.01 10.02 26.99

1963 43.37 10.04 33.33

Based on data from the National Statistical Bureau

By the mid-1960s, demographic pressures could not be ignored. As early as the late 1950s, the government’s earlier pro-natalist policy had already given way to rising concern about the effects of accelerating population growth. Once recovery from the Great Leap Forward was under way, the renewed urgency of demographic pressures was recognised by the government, which for the first time undertook policy initiatives that recognised, at last, the need to control population growth. In practice, however, population control measures had a minimal impact. The chaos of the early years of the Cultural Revolution (1966–76) made long-term planning impossible, as a result of which fertility remained very high. Indeed, one can say that until the early 1970s, China still had no effective population policy and the rate of natural increase remained very high (2.6 per cent p.a. during 1966–72, and with a crude birth rate of over 33 per thousand during the same period). As a result, large annual increments were added to China’s total population – on average, an extraordinary 20.9 million p.a. between 1966 and 1972.



Box 1.2 The Cultural Revolution (CR) 1966–1976

Mao, who had been sidelined during the previous recovery period following the GLF,

manoeuvred himself back to centre stage, where he showed his antipathy towards the

‘revisionist’ nature of the recovery policies by launching (in 1965) a ‘socialist education

movement’. By 1966, this movement had been transformed into what we now know as

the ‘Great Proletarian Cultural Revolution’. In contrast to the GLF, the CR was not

primarily an economic phenomenon, nor did it have the devastating economic conse-

quences of the GLF. Indeed, economic growth continued during the CR decade.

Whether a ‘CR economic strategy’ really existed has long been debated. We can, howev-

er, distinguish two economic themes that reflected the underlying philosophical thrust of

the period:

i) a re-emphasis of egalitarianism, highlighted in a downgrading of material incen-tives, the elimination of bonus payments and encouragement of ideological motivation, and

ii) an emphasis on self-reliance, as illustrated, for instance, by the call for grain self-sufficiency at regional (provincial) levels or the gigantic industrial initiative (the ‘Third Front’), which was designed to create a self-sufficient industrial base in the deep interior of China.

The costs involved were enormous, both immediately and in terms of long-term economic

development as the education system broke down for an entire decade and longer-term

economic planning was largely absent.

1.4.2 From the early 1970s to today

In order to provide you with an insight into population policy and targets in China from the early 1970s to today, you should next read the remaining part of the chapter by Scharping.

Reading

Please return to the chapter by Scharping, and read pages 32–38.

Again, please note the Chinese government’s attitude towards population growth

and its motives in the formulation of population policies.

How far do you think the period from the early 1970s onwards represents a change in population policy compared to the earlier period?

How is this reflected in the definition of population targets?

It was, in fact, not until 1972 that the government created institutions that effectively began to formulate and implement family planning policies (see Posters 1.1 and 1.2). The focus of these efforts included measures designed to control births. In particular, early policy initiatives heralded restrictions on family size through late marriages, with spaced and fewer births (in Chinese, wan, xi, shao). In 1970, the CCP Central Committee and State Council had first formally proposed an optimum two children per family, and for the first time, key population growth targets were reportedly included in a Five-Year

Scharping (2003)

‘Motives and goals of Chinese birth control’.

Birth Control in China, 1949–2000. Reproduced in the

Module Reader. pp. 32–38.



Plan (Fourth Five Year Plan, 1971–75). These and other goals were pursued at local levels through the creation of birth control committees, which were responsible for implementing national strategic goals through the formula-tion of local population growth targets.

Poster 1.1 ‘Practise birth control for the Revolution!’ (1972)

Source: http://www.iisg.nl/~landsberger/

Poster 1.2 ‘Practise birth control for the Revolution!’ (1974)

Source: http://www.iisg.nl/~landsberger/

Until the late 1970s, the ideal of the two-child family was propagated through slogans, such as ‘one isn’t too few; two is good; three is too many’. Because urban citizens are always more susceptible to accepting family planning, cities were the initial focus of the two-child campaign, although it later spread to the countryside. Meanwhile, the family planning programme began to shift from voluntary to compulsory. Material rewards and sanctions were introduced in an effort to check the excessive growth of families, and it was from about this time that a sharp decline in fertility and population growth, especially in cities, took place.



The watershed Third Plenum of the Eleventh CCP Central Committee (December 1978) was symbolic of a shift from a development strategy centred on ideology to one focused on economic construction. This was reflected in a shift in family planning emphasis from late marriages and spaced births to even stricter control of family size. Early in 1979, a new policy decision was announced, whereby each married couple was encour-aged to have only one child. This one-child policy was initially and ambiguously propagated under a slogan – ‘one is best, at most two, but never a third’ – that seemed officially to accept two-children families, whilst suggesting material penalties associ-ated with having more than two children. At first, the policy, which was meant to apply equally to both urban and rural sectors, was voluntary. Couples freely decided whether or not to sign a ‘one-child pledge’. If they did so, they received significant cash and other benefits, including housing priority, extra maternity leave, higher pensions and priority access to jobs, as well as education and health services. But by 1982, when the strategic importance of population control was highlighted in the inclusion of family planning in the PRC Constitution3, a more coercive system was in place, with severe penalties imposed on couples who had a second or higher order birth. The severity of such penal-ties is suggested in Judith Banister’s comment that ‘any second or higher order births that happened in spite of government pressure were met with escalating punishments designed to impoverish the offending couple for at least fourteen years if not for life’ (1987: 191). In some cases, pregnant women were forced to suffer abortions and sterilisation. Especially in the countryside, where a strong preference for boys persisted (for practical as well as cultural reasons), the policy met with strong re-sistance from couples whose first child was a girl. As a consequence, the sex ratio at birth revealed increasingly abnormal traits. (Further details will be discussed in a subsection below.) For such reasons, neither the extreme coercion nor the literal implementa-tion of a one-child policy lasted. Over time and continuing down to the present day, there has been a shift towards a more relaxed policy interpreta-tion, which partly reflects these unforeseen consequences of coercion. Some observers have questioned whether the one-child family policy was neces-sary. Writing in the mid 1990s, Crook argued that the target of keeping China’s total population no bigger than 1.2 billion in 2000 could have been reached through a ‘two-children’ policy, assuming that couples started childbearing much later and spaced the births with a four-year interval between them4.

3 The Constitution reads, ‘The state promotes family planning so that population growth

may fit the plans for economic and social development’ (quoted by Xie Zhenming in Peng and Guo, 2000:52).

4 He adds, ‘This is because the natural growth rate of a population can be reduced either by reducing the net rate of reproduction (as the Chinese sought to do) or by increasing the mean length of the female generation – that is, the number of years it takes for a cohort of women to reproduce themselves’ (Crook, 1997: 146).



Judith Banister has also argued against the need for compulsion, pointing out that in other parts of East Asia (Korea, Japan, Taiwan, Hong Kong), social and economic modernisation has been accompanied by delayed marriages and voluntary regulation of family size and that improved education (especially for women) and the institution of appropriate health services would have encouraged voluntary infertility. She adds that as soon as they became available, Chinese couples were quite prepared to use modern birth control techniques – evidence that there ‘may have been some latent demand for effective fertility control’ (Banister, 2002: 56–57). In any case, by the second half of the 1980s, exceptions to the one-child policy were introduced, whereby rural couples were permitted to have a second baby, if the first child had been a girl. Confirmation of the continuing relaxation of the one-child family policy can be found in China’s first na-tional family planning law (The Population and Family Planning Law, effective from 1 September 2002). The institution of this law was an im-portant event that put in place a formal legal framework for the implementation of national population and birth control policies. Zhang Weiqing (Minister in charge of the State Family Planning Commission), said the new legislation was designed to effectively eliminate ‘localized rules and regulations governing population and family planning efforts’. Zhang added the following comment:

…[t]he human-oriented law [i.e. the Family Planning Law] ordains that family planning is a duty of Chinese citizens, but they also enjoy legal rights and interests, for which they are entitled to legal protection. [The law] especially stresses that no abuse of official power, obtrusion or infringement on public rights are allowed in the performance of family planning tasks. People are to be fully informed of their rights of reproductive health care, choice of contraception, social welfare, and education, which is considered a major feature of the law. The government will offer benefits to couples abiding by the law, while ‘social alimony,’ instead of the once prevailing fine, will be charged to those who break it.

By the second decade of the twenty-first century, a de facto two-children policy existed in most parts of the countryside, while in cities couples who were both only children were also permitted to have a second child. The most recent initiative was unveiled at the Third Plenum of the CCP Central Com-mittee (November 2013), when it was announced that couples would in future be allowed to have two children if just one spouse (rather than both, as previously specified) is an only child. The most recent initiative at the Fifth Plenum of the CCP in November 2015 stated that the two child policy would become universal. The latest loosening of the one-child policy confirms that China’s demographic dividend is now exhausted, and that action is needed to meet the challenges posed by a rapidly ageing population and a labour force about to peak. It also reflects the government’s confidence that rapid GDP growth, accelerated urbanisation and the emergence of a sizeable affluent urban middle class have permanently reduced fertility to a level that can be maintained without generating an unsustainable surge in population growth. As long as such confidence proves not to be misplaced, the decision may presage the eventual wholesale dismantling of the one-child policy. You should note, however, that the more relaxed approach towards family formation has not been accompanied by a rise in the birth rate: on the



contrary, fertility has continued to decline – even if aided by a fall in the child-bearing population of women between 18 and 32. The official orthodoxy remains that without family control policies, there would have been some 400 million more births in China since 1978. In recent years, however, there has been growing recognition of the serious costs of the implementation of the one-child family policy, including among Chinese analysts. From this perspective, it is significant that the text of the current Twelfth Five-Year Plan (2011–15) contains not a single mention of the policy by name. Instead, there is just one short chapter, in which the planned upper limit to total population in 2015 is set at 1.39 million. This figure implies an average annual rate of natural increase of about 7 per thousand – higher than the actual rate in recent years. As for the longer-term future, not until at least the 2030s will China achieve zero population growth. How big it will be when it reaches its peak around the middle of the twenty-first century remains uncertain, though the likeli-hood is that it will lie between 1.5 and 1.6 billion. Also highlighting China’s international success in controlling births is the finding that at some point between 2040 and 2050, India’s population will overtake that of China to become the largest in the world. So far we have elaborated on the Chinese government’s population policies and their effects on demographic change. The question to which extent the introduction of market economy principles can be another cause for demo-graphic change is discussed in your next reading.

Reading

Please now read the article, ‘Population problems under market conditions’.

While reading this source, make sure that your notes identify the:

benefits that a market economy can generate for population control

negative effects of a market economic system for solving population problems.

Having studied this reading, you will have achieved another learning outcome – that is, the ability to evaluate not only the impact of deliberate population policies on demographic change in China, but also the impact that economic reforms have had. You will know by now that the introduction of economic reforms after 1978 has set free forces that have had a mixed effect on demographic change. On the one hand, private and social accumulation of wealth has been promoted, which has had a beneficial impact on efforts to control population growth. The development of the labour market as well as increasing urbanisation in the countryside have also had similar effects. On the other hand, reform and decentralisation have led to the emergence of administrative difficulties in population control – a development that has impeded attempts to further control population growth.

Tian (1994) ‘Population

problems under market conditions’. China’s Economic Reform: A Study with Documents. Reproduced in the Module Reader.



1.5 Structural Features of Population and Population Changes in China

Important structural features are concealed within the estimates of the changing demographic profile of China that are presented above. Some of these features will be highlighted briefly in this unit. We will do so by comparing the situation in the early 1950s (the start of China’s First Five-Year Plan), the late 1970s–early 1980s (watershed years that mark the break between socialist planning and market-orientated reforms) and 2000 (the year of the most recent national census). As you study the following subsec-tions and readings, you will achieve another major learning outcome, which will enable you to discuss important structural features of China’s popula-tion – its distribution, age structure and sex ratio.

1.5.1 Population distribution across regions and sectors

One important structural feature of China’s demographics is the distribution of total population among geographical regions. Table 1.4 captures at a very general level the major differences that exist in population distribution. The regional framework highlights a simple, but useful, vertical division between eastern (or coastal), central and western provinces. Please examine now the data in Table 1.4 and take short notes of your observations. In 2013 how was China’s population distributed across re-gions? And how has this distribution changed since 1952?

Table 1.4 Changing geographical distribution of total population

Year

Proportion of total population in each region (%)

Eastern Central Western

1952 42.3 34.5 23.2

1978 41.0 35.7 23.2

2000 42.4 34.7 23.4

2005 43.1 34.7 22.2

2013 44.8 33.2 22.0

Note: Breakdown of regions:

Eastern: Beijing, Tianjin, Hebei, Liaoning, Shanghai, Jiangsu, Xhejiang, Fujian, Shandong, Guangdong, Guangxi, Hainan.

Central: Shanxi, Inner Mongolia, Jilin, Heilongjiang, Anhui, Jiangxi, Henan, Hubei, Hunan

Western: Chongqing, Sichuan, Gujizhou, Yunnan, Tibet, Shaanxi, Gansu, Ningxia, Xinjiang.

Based on data from the National Statistical Bureau

As you will have noticed, the data point to considerable stability in population distribution among these three regions, with population density decreasing from east to west. For political reasons the demographic importance of eastern China fell slightly during 1952 and 1978 (broadly speaking, during the Mao era), while that of central China increased. This trend towards a more balanced distribution has been reversed since 1978, because the eastern coastal provinces have benefited to a disproportionate extent from the economic reforms. There is, however, a major qualification to the data shown in Table 1.4. The figures shown there are based on official household registration data and therefore



take no account of migration. In general, rural-urban migration in China has been characterised by the movement of enormous numbers of people from central and western China to coastal provinces. If this were factored into the analysis, the demographic weight of the eastern coastal region would loom much larger than is shown in the table. As for population distribution between countryside and cities, under Mao Zedong there was a deliberate anti-urban bias (especially after the Great Leap Forward). This not only embraced controls to prevent peasants from entering cities (see the hukou explanation below), but also involved the implementation of measures designed to send urban residents (especially unemployed young people) to the countryside. This can be called an at-tempt, as one scholar put it, to ‘ruralise’ China (Banister, 1987: 342). By contrast, starting in the 1980s, this process was reversed. The post-1978 period has therefore witnessed an accelerated process of urbani-sation in China. In 2011 a watershed was passed, when the urban share of China’s population for the first time exceeded 50 per cent. Officially, the urban share of China’s total population rose from 17.9 per cent to 53.73 per cent bet-ween 1978 and 2013 (see data published by the National Bureau of Statistics).

Study Note

’Hukou’

In the 1950s, large-scale migration from countryside to cities took place in China. But by the

end of the decade, the Chinese Communist Party introduced the household registration

(hukou) system as a means of limiting the geographical and occupational mobility of the

population. Through his or her hukou, a person was assigned an agricultural or non-

agricultural (urban) status, which was extremely difficult and costly to change. The device

proved an extremely effective way of controlling inter-provincial and rural-urban migration.

Especially migration into cities was curbed by this device, as urban rations and other essential

services could only be obtained there on presentation of an appropriate urban hukou.

As a result, for the next twenty years, voluntary movements of population effectively

ceased, although the government itself sometimes (for example, during the Cultural

Revolution) instigated deliberate migrations, usually from cities to villages. Since 1979,

however, economic reforms have diminished the usefulness of the household registration

system, and large-scale migration has generated a huge floating population in major

Chinese cities. In August 2001, it was officially announced that over a five-year period,

hukou would be abolished in the interests of facilitating the movement of labour be-

tween rural and urban areas of China. However, this has proved a slow process. It was

not unitl July 2014 that a single national system was registration (jumin hukou). The

pupose of this reform was to sever the link between welfare entitlement and residence.

However the reform stopped short of full abolition and cities retain flexibility over the

allocation of welfare resources. In particular large cities such as Beijing and Shanghai

have made it more difficult for migrants to settle permanently while mid-sized cities have

made it easier for higher skilled but more difficult for low-skilled migrants. It would

therefore seem likely that some of the hukou provisions will remain in force for the

foreseeable future, at least in the large coastal megalopolises of China. We will discuss

rural-urban migration of labour further in Unit 2.



The geographical profile, both regional and rural-urban distribution, has important economic implications, which we will explore in the coming units. Suffice to say here that it has significant implications for the interpre-tation of levels of employment, food consumption and living standards across China.

1.5.2 Population and age structure

Age structure is another major demographic factor with critically important social and economic implications. Before turning to those wide-reaching implications, take a minute to think about the factors that can influence a population’s age structure. From what you have learned so far, how do you think those factors can impact on the age structure of China’s population?

Reading

Please read Li Yongping and Peng Xizhe, ‘Age and sex structures’, which deals with

China’s age structure. In the reading, three factors, namely: death rate; fertility; socio-

economic factors are identified as having had a distinct effect on the population’s age

structure. Please take notes to explain the effects of these factors.

As you will know from the reading, a rapid decline in both death and fertility rates, together with socio-economic changes, has impacted on the age structure of China’s population. You will have seen that there has been a steady rise in the share of those of working age (15–64 years) in China’s total population since the first National Census in 1953. This rise has been offset by a steady decline in the proportion of children in the population, especial-ly in more recent years under the impact of strict family planning policies. Examine the data provided in Table 1.5 to confirm this trend.

Table 1.5 The changing age structure of China’s population

Proportion of population in each age category (%)

0–14 15–64 65 and above

1953 36.3 57.3 4.4

1982 33.6 61.5 4.9

2000 22.9 70.1 7.0

2005 20.3 72.0 7.7

2006 19.8 72.3 7.9

2007 19.4 72.5 8.1

2008 19.0 72.7 8.3

2009 18.5 73.0 8.5

2010 16.6 74.5 8.9

2011 16.5 74.4 9.1

2012 16.5 74.1 9.4

2013 16.4 73.9 9.7

Based on data from China, National Bureau of Statistics

Li & Peng (2000) ‘Age

and sex structures’. The Changing Population of China. Reproduced in

the Module Reader.



Reading

Please continue now by reading from the chapter by Banister, which discusses demo-

graphic trends, particularly the age composition of population.

Some of the important questions that this reading addresses include:

what does the age composition mean for economic growth?

what are the implications in terms of employment generation and consumption in China since the 1970s?

As you read this source, please make sure your notes explain:

the economic implications due to China’s population age structure until today

the challenges that remain ahead for China’s economic development

how far factors such as urbanisation and migration appear to be able to ease the pressures that are generated by the population’s age composition in China.

As you have seen, demographic change has created an age structure in China that is characterised by a relatively large share of the population being of working age. For many years, such conditions were described as consti-tuting a ‘golden age’, allowing the economy to benefit from rises in productivity, savings and investment, while minimising spending on consumption and health. The employment implications were especially profound, as we shall discuss in more detail in the following unit. More recently, however, there is a growing consensus of opinion that China has exhausted its demographic dividend. One striking indication of the new circumstances facing China emerged in 2011, when, for the first time since 1949, the share of China’s working age population declined. In absolute terms, the working age population is expected to peak in 2015. Meanwhile, as you will have learned from Banister, the problem of an ageing population – an issue of great concern in many developed countries – is only now beginning to emerge in China. You can see from Table 1.5 that there has already been a quite significant rise in the share of those above 65 years of age since the early 1980s. From 4.9 per cent in 1982, the share rose to 9.7 per cent in 2013. China now has the largest population in the world of people over the age of 60, accounting for close to one-fifth of the global total. It is estimated that by 2020 the share of over-65s in the total population will reach around 12 per cent. Thereafter, the ageing of China’s population will become an increasingly heavy burden. A report published in 2008 by the National Committee on Ageing Projections indicated that by 2020, the number of over-60s will reach 248 million (17 percent of total population), and rise to a peak of 300-400 million (over 30 percent of population) in the second half of the century, by when those aged 80 and above would have reached a quarter of all over-60s. Looking further ahead, by 2050 almost one in three of China’s population will have reached the age of 60 or above, which means that every two ‘young’ people will need to support one elderly person – a very high ratio by international standards.

Banister (2002)

‘Population growth in

China and its economic implications’. Economic Security and Strategic Issues. Reproduced in

the Module Reader.



1.5.3 Population and sex ratio

Besides population distribution and age structure, an important structural feature that we mentioned above is the sex ratio of a population. In China’s case, the abnormally skewed nature of this ratio has attracted international attention.

Reading

Regarding this topic, please turn again to the Module Reader and study the second part

of ‘Age and sex structures’ pp. 68–76.

In reading this, we would like you to take short note of

the extent of abnormality of the sex ratio of China’s population, keeping in mind the large regional differences that exist

the underlying causes of this abnormal ratio

its wider economic and social consequences.

In 1990 China’s Population Census showed that the male/female sex ratio at birth in China was 113.8 (1989). This was well above international norms of 103–107. As a result, much debate – both within the Chinese government and the international research community – has focused on the reasons for such an abnormality. As you will have learnt from your study of Li and Peng, the underlying reasons for such a skewed ratio can be found in various forms of resistance to the one-child policy. One was to under-report female births and to use adoption as a device to give couples a second – or third – chance to conceive a male child. Another was the use, by pregnant women, of ultra-sound scans to determine the sex of the child they were carrying and, subsequently – if the scan showed a female child – to have an abortion. And, most terrible of all, the incidence of female infanticide increased. This includes those baby girls that die following mistreatment or lack of care. According to the 2000 census, the average male/female ratio was 119.92:100 among newborn babies, and by 2005 it had risen further to 123:100. Note, however, that there are again strong regional differences. In Jiangxi, Guang-dong and Henan Provinces, for instance, the sex ratio at birth amounted to over 130 – a figure significantly higher than the corresponding figure (c.111)

Li & Peng (2000) ‘Age

and sex structures’. The Changing Population of China. pp. 68–76.



revealed in the 1990 census. Also, distinctions between rural and urban areas are noteworthy. In the last few years, there is some evidence that the male/female ratio has begun to decline. Even so, China’s figure is well above internationally acceptable norms (103–107). As you will have learnt from the reading, such abnormal sex ratios have a significant and wide-reaching impact on both the economic and social realms in China. For example, the problem of caring for the elderly will be exacerbated by the highly unbalanced gender ratio. It has traditionally been the responsibility of women, especially daughters-in-law, to care for the elderly. This role will, however, become increasingly difficult to fulfil. Not only has the skewed sex ratio given rise to a growing shortage of daughters-in-law, but increasing labour force participation by women is also taking its toll on informal provision of long-term care.

Reading

Before you conclude your study of this unit, and to synthesise the issues we have

covered, please go to the VLE and the reading ‘Demographic factors in China’s economic

growth’ by Peng (2009)

1.6 Conclusion

In this unit you have studied major aspects of China’s changing demograph-ic profile since the founding of the People’s Republic. We started by introducing key demographic terms and ideas, and then proceeded with an analysis of China’s demographic data and population policies since the 1950s. In Unit 2 we will discuss a related topic – the employment challenge. Before continuing with the next unit, however, it is important that you have achieved the learning objectives as stated at the beginning of this unit, an ability to explain and discuss:

• China’s demographic data since the 1950s • the changing nature of China’s demographic problems since 1949 • the Chinese government’s changing policies towards population • the impact of economic reforms and deliberate population policies on

population size, structure and rate of change • the economic and social impact of population change in China • important structural features of China’s population, such as its

distribution, age structure and sex ratio • future population challenges faced by China in the coming decades.

Peng (2009)

‘Demographic factors in

China’s economic growth’. In: N Islam

(Ed.) Resurgent China: Issues for the Future

available on the VLE.



Optional Reading

Beyond the core readings, we suggest some optional readings that you may refer to in

order to pursue areas that are of particular interest to you. You should also feel free to

gather literature on areas you would like to pursue further. These readings are, however,

optional and they are not required for a good understanding of the module, and only the

set reading is examined.

If you would like to read more on the principles of population change and the implica-

tions of such change for economic development, a very helpful introduction to this topic

is provided in the following book:

Crook N (1997) Principles of Population and Development, with Illustrations from Asia and Africa. Oxford UK: Oxford University Press.

If you have time and an interest in the regional distribution of population in China, you

could read:

Wang G (2000) ‘The distribution of China’s population and its changes’. In: X Peng and Z Guo (Eds.) The Changing Population of China. Oxford UK: Blackwell. pp. 11–21.

This provides a good overview of population distribution and its changes, as well as the

factors that influence such distribution.

A very useful introduction to the urbanisation process in China since the 1950s is

provided in the following reading:

Zhong F (2000) ‘Urbanization’. In: X Peng and Z Guo (Eds.) The Changing Population of China. Oxford UK: Blackwell. pp. 167–78.

References

Banister J (1987) China’s Changing Population. Stanford CA: Stanford University Press. Banister J (2002) ‘Population growth in China and its economic implications’. In: Robert Ash (Ed.) China's Integration in Asia: Economic Security and Strategic Issues. Richmond UK: Curzon Press. Crook N (1997) Principles of Population and Development, with Illustrations from Asia and Africa. Oxford UK: Oxford University Press. Greenhalgh S (2005) ‘Population science, missile science: the origins of China’s one-child policy’. The China Quarterly, 182 (June), 253–76. Gu B and K Roy (1995) ‘Sex ratio at birth in China, with reference to other areas in east asia: what we know’. Asia-Pacific Population Journal, 10 (3), 17–42. Howe C, YY Kueh and R Ash (2003) China’s Economic Reform: A Study with Documents. London & New York: RoutledgeCurzon. Li Y and X Peng (2000) ‘Age and sex structures’. In: X Peng and G Zhigang (Eds.) The Changing Population of China. Oxford UK: Blackwell.



Malthus TR (1798) Essay on the Principle of Population, as it Affects the Future Improvement of Society. London: J Johnson.

Mao T (1977) Collected Works. Beijing: Foreign Languages Press.

Montgomery K (2001) ‘The demographic transition model’.

National Statistical Bureau (n.d.) Statistical Yearbook of China. Beijing: National Statistical Bureau. Available from: www.stats.gov.cn/english/newrelease/publications/

Peng X and Z Guo (Eds.) (2000) The Changing Population of China. Oxford UK: Blackwell.

Peng X (2009) ‘Demographic factors in China’s economic growth’. In: N Islam (Ed.) Resurgent China: Issues for the Future. Basingstoke UK: Palgrave Macmillan. pp. 52–71.

Ren X (2013) Urban China. Cambridge UK: Polity Press.

Scharping T (2003) Birth Control in China, 1949–2000. London and New York: RoutledgeCurzon.

Shapiro J (2001) Mao's War Against Nature: Politics and the Environment in Revolutionary China. Cambridge UK: Cambridge University Press.

Tian X (1994) ‘Population problems under market conditions’. In: C Howe, YY Kueh and R Ash (2003) China’s Economic Reform: A Study with Documents. London & New York: RoutledgeCurzon.

United States Population Reference Bureau (2013) 2013 World Population Data Sheet. Available from: http://www.prb.org/pdf13/2013-population-data-sheet_eng.pdf

Wang F and A Mason (2008) ‘The demographic factor in China’s transition’. In: L Brandt and TG Rawski (Eds.) China’s Great Economic Transformation. New York: Cambridge University Press. pp. 136–66.

Wang G (2000) ‘The distribution of China’s population and its changes’. In: X Peng and Z Guo (Eds.) The Changing Population of China. Oxford UK: Blackwell. pp. 11–21.

Xie Z (2000) ‘Population policy and the family-planning programme’. In: X Peng and Z Guo (Eds.) The Changing Population of China. Oxford UK: Blackwell. pp .51–63.

Zhong F (2000) ‘Urbanization’. In: X Peng and Z Guo (Eds.) The Changing Population of China. Oxford UK: Blackwell. pp. 167–78.