China’s controversial one-child policy is responsible for 30 million more males than females under the age of 20. That’s because 143 boys are born for every 100 girls, due to sex selective abortions or, in the case of poor rural parents, leaving a newborn girl to die in a ditch so the parents can try again for a man child and (more often) less aggressive medical care for girls.

Now China’s largest city, Shanghai, is ignoring national policy and encouraging couples to have a second child in order to head off another unintended consequence of the one-child policy — a graying population. One in five Shanghai residents are seniors. Projections place that ratio at 1 in 3 by 2020 and by 2050 there may be more Chinese seniors than the entire population of Americans today.

Implications? China is now enjoying a demographic dividend. Since the 1970s, China’s working population has grown much faster than its total population. Add in dramatically rising productivity from economic reform and the inevitable consequence has been a sharp improvement in per-capita income and living standard that even the global recession has been able to brake but not halt.

Sometime in the next decade that process will reverse. China’s working population will begin to grow more slowly than its total population. The demographic dividend will become a demographic tax.

Another consequence: For the past three decades China has had a demographic bias toward trade surpluses–working population is a proxy for production, and when it grows faster than the total population (a proxy for consumption) the difference becomes exports. But over the next three decades, China is likely to have a demographic bias toward trade deficits instead.

Of course, the rules about who and who cannot have a second child seem a little complicated to an outsider:

The amended Shanghai Population and Family Planning Rule enacted in April 2004 identified nine types of urban couples and 12 types of rural couples eligible for a second child.

Examples include when both spouses are from a one-child family and one spouse is from a one-child family and the other has rural residency.

Divorced Shanghai residents are allowed a child with a new spouse if one spouse has no child and the other has one or two children from the previous marriage. Both spouses having one child in the previous marriage are also allowed to have one child if they are both from one-child family.

Couples with one disabled spouse whose ability to work is impaired can also have more than one child.

That is what happens when you put bureaucrats in charge of reproduction. Thankfully, America has not yet descended to the point where Congress has any say in the matter.

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