What the End of the One-Child Policy Means for China

China one child
Li Yan, pregnant with her second child, lies on a bed as her daughter places her head on her mother's stomach in Hefei, Anhui province, on February 20, 2014. China Daily/Reuters

Brothers and sisters are now welcome in China.

After 35 years, the Communist Party has decided to drop China's one-child policy. The government announced on Thursday that all Chinese families are now legally allowed to have two children, the latest step in loosening a policy that has been subject to much criticism by human rights advocates over the years.

According to the Chinese government, it is abandoning the policy "as an active response to an aging population." The decision is likely to have ramifications in political, economic and human rights spheres.

What Was the One-Child Policy?

Introduced in 1979, the policy was seen as a measure to prevent a population explosion in China. The policy limited Chinese couples to having a single child, though a spokesperson for China's National Population and Family Planning Commission—which oversees the policy's implementation—said in 2007 that just 35.9 percent of the population was restricted by the law. Exceptions reportedly applied to ethnic minorities, couples in which both husband and wife were only children and couples in rural areas whose first child was a girl.

The government implemented a major relaxation of the policy in 2013, when it announced that two children would be allowed to couples where either the husband or wife was an only child.

Why Has It Changed?

China's population is getting old. The United Nations predicts that the percentage of China's population aged 60 and above will almost triple by 2050, going from 16.8 percent to 45.4 percent in that time. China has one of the oldest populations in the world, with a mean age of 43.2, a figure set to rise to 52.7 by 2050. China's fertility rate stands at 1.6 children born per woman. While not as low as in some European countries, such as Italy and Germany, it's lower than in the U.S. and U.K. and is well below the rate of 2.1 required to replace populations across generations, the BBC reported. China's working-age population—those between 16 and 59—has also been in decline for the past three years.

Steve Tsang, director of the China Policy Institute at the University of Nottingham, says that the Communist Party is acting now to avoid reaching a critical working-population deficit in the future. "The rapid growth [in China] in the last 30-plus years of reform was significantly contributed to by the demographic dividend," says Tsang. "If they do not change policy, the demographic deficit will slow growth down in China, something which the Communist Party cannot afford to see happen."

How Has the One-Child Policy Affected Chinese Families?

For the past 30 or so years, having a child in China has required couples to jump through a series of regulatory hoops. According to William Nee, a China researcher at Amnesty International, Chinese couples must be married and apply for a birth permit before having a child. If they fail to meet these criteria before having their one allowed child, or have a second child without permission, they can be heavily fined. In one notable case, Chinese director Zhang Yimou—who was behind the 2008 Beijing Olympics opening ceremony—was fined 7.5 million yuan ($1.2 million) for breaching the policy by having two sons and a daughter.

Perhaps the most shocking impact of the policy has been the reported use of forced abortions and sterilizations. As recently as September, a Chinese woman who was eight months pregnant was reportedly coerced into having an abortion under the threat that her husband would lose his job if she didn't. "[Forced abortions and sterilizations] are ongoing problems," says Nee. "This has continued under the radar, and there are still testimonies all the time of people, especially in rural areas, where there is still a preference for having more children, of forced sterilizations and forced abortions continuing."

How Will the Change Be Received in China and Elsewhere?

According to Tsang, dropping the one-child policy is unlikely to have a major impact on most urban Chinese couples. "In urban China, most middle-class families don't want to have more than one child anyway," he says. "Raising children is now becoming so expensive in China that most families simply cannot afford to have more than one child." According to Bloomberg Business, the cost of raising a child in China averages about 23,000 yuan ($3,475) per year—equivalent to 43 percent of average household income.

Nee argues that what's really at stake here is individuals' control over their own bodies and reproduction decisions. "It's a welcome step but China needs to immediately and completely abolish its system of regulating people's decisions [about] whether or not to have children," says Nee. "People should have the right to have three or four children, or however many they want."

What Will the Economic Impact Be?

Reuters reported that growth in China's economy is set to fall to a 25-year low of less than 7 percent in 2015, and interest rates have been slashed six times in less than a year in the country. A series of devaluations of the Chinese yuan by the People's Bank of China in August sparked fears of a global currency war, though the currency has since stabilized.

Chang Liu, a China economist at London macroeconomic researchers Capital Economics, says that reversing the one-child policy is unlikely to have a big impact on the state of the Chinese economy. He cites the examples of Hong Kong and Singapore, which have two of the lowest fertility rates and highest GDPs per capita in the world, as precedents that suggest desire for children among Chinese couples will wane as they start to earn more.

"We don't think the impact will be very big, at least in terms of economic outlook for China. Part of the reason is because as people get richer, they tend to have fewer babies or children anyway," says Liu.

On the other hand, Tsang says there is potential that the measure will reverse China's shrinking workforce—and thereby increase the country's potential for economic growth. That'll be good both in the country and across the globe. "We don't want to see China imploding. If the Chinese economy gets into a serious negative-growth situation, it will have a negative impact on the global economy," says Tsang. "This is one step that will make it easier for the Chinese government to sustain a level of growth that is positive."