Austin Head-Jones's Entry For The 2004 Moffatt Prize in Economics
China's dramatic birth planning policies, while incredibly controversial in their curtailment of basic reproductive rights, stemmed from a direct, economic need to control the country's population. In the current international economic system, population is one of the strongest factors affecting a country's economy. It both determines the production potential of the country and draws on large amounts of government money for healthcare and education. China's overpopulation had created severe economic problems within the country, and the balancing of this population was a key element in China's economic success. However, although its birth planning policies were both effective and economically beneficial to the country, it is likely that China could have brought its population into line without relying on the harsh measures of coerced sterilization and abortion.The economic and demographic factors operating inside a country constantly and consistently affect each other. It is commonly accepted among modern economists that the demographic features of a population are at least partially dependent on the features of a country's economy. It is believed that underdeveloped and agriculturally intensive economies naturally lead to higher fertility rates, whereas highly developed and heavily industrialized or urbanized countries typically have lower fertility rates, as labor becomes less important to production in relation to capital. Likewise, developing countries have uniformly higher mortality rates than fully developed ones, leading to a population check that has a much greater impact on the third world than the first. "Most industrialized countries underwent a fundamental shift from extremely high to low mortality and fertility rates...and many expect today's developing countries to experience the same sort of demographic transition" (Yuan Tien et all, 6). China is typically placed in the list of "developing" countries with rapidly falling fertility rates, and much of the headway it has made in reducing its population is often attributed to the economic incentives to modern Chinese of having fewer children (Maurer-Fazio, lecture, 10/21/03).
Population is not simply controlled by a country's economic development, however. Often the fertility rate of a population is also decided by other factors such as tradition, religion, or other personal beliefs, and the population level within a country greatly affects its economy in turn. Population is a valuable resource dictating how much a country is able to produce within a given period of time, but it also draws on the other resources of a country, requiring investments in education, healthcare, and government welfare or stipend programs. How far a country's population is over or under its ideal level is one of the major factors dictating how much economic growth that country has the potential for.
The three basic economic factors of production are land, labor and capital, and a country's population level determines how much labor is available. The higher the population, the more labor, which has led some leaders to believe that their countries' birth rates should rise as much as possible. "Mao's response was to condemn [concerns about China's overpopulation] as utterly groundless, and to insist that China's large population was a great asset" (White, 252). However, when the level of available labor significantly surpasses a country's other resources, the factors of production become unbalanced, leading to a labor surplus that causes problems like unemployment and insufficient healthcare and education.
This kind of labor surplus was behind China's "population problem", where labor far overbalanced both the country's land and available capital. "The growing population base, land degradation, and industrial expansion have caused a decline in the per capita supply of agricultural land...On a per capita basis, cultivated land has dropped to 1.8 mu in 1988 from 2.7 mu in 1949" (Yuan Tien et all, 35). The population levels have created a large labor surplus, causing high unemployment despite the government's subsidizing of state owned employers. "The lack of jobs continues to be serious...In 1982, the unemployment rate reached 8.3% in Beijing and 7.7% in Shanghai" (Yuan Tien et all, 30).
Be Sure to Continue to Page 2 of "The Economics of Chinese Birth Planning ".
