Nation’s labour force has been shrinking by 3 million people a year since 2012, writes Ambrose Evans-Pritchard

China's Communist Party has scrapped its hated one-child policy in a bid to shore up political support, but the move comes far too late to avert a collapse of the workforce and a demographic crisis by the late 2020s.

All couples will be allowed to have a second child under new rules agreed at the party's closely-watched 5th Plenum in Beijing. The ban on larger families in cities will remain despite pleas from Chinese academics for total freedom.

The policy shift will make no difference to the workforce for almost 20 years when China will be in the full grip of a demographic crunch.

"They have merely moved to a two-child policy. The family planning authorities are still there, and there is still an apparatus of state power intruding into people's intimate lives," said Jonathan Fenby, a China veteran at Trusted Sources.

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The coercive anti-natalist policies begun by Mao Zedong in the early 1970s - and pushed further by ideologues in thrall to the Club of Rome's Malthusian doomsday theories, the "Limits of Growth" - have had powerful and perverse effects. They freed workers from family duties and created a "demographic dividend" of sorts that until recently flattered China's growth rate.

Now the process is kicking violently into reverse. The workforce began to decline in absolute terms in 2012 and has since been shrinking by 3 million people a year.

The International Monetary Fund says the reserve army of labour peaked five years ago and is going into "precipitous decline", threatening a labour shortage of 140 million by the early 2030s.

This is happening just as life expectancy soars to 75.2 - with a target of 77 in 2020 - causing a drastic deterioration in the ratio of workers to pensioners, and, unlike the demographic decline in Japan, it will start to bite before the country is rich. The ratio was 6.6 in 2000. It is expected to be 2.37 in 2030 and 1.25 in 2060.

The Chinese Academy of Social Sciences says the fertility rate has collapsed to 1.4 and is nearing the danger line of 1.3, the so-called "low fertility trap" where it becomes culturally self-perpetuating. This has already happened in Japan, Korea and Taiwan, and in some of China's richest cities.

The rate in Shanghai has fallen to 0.8 for complex social reasons that no longer have anything to do with the one-child policy. A relaxation of the rules in 2013 has not led to a pick-up in the city.

"Having children is simply too expensive. Working couples can't afford private hospital costs, childcare and kindergartens," said Fenby.

China may already have left it too late to ditch the one-child policy. Critics say the damage has been evident for years, leaving aside the traumatic suffering of poor women seized by police after tip-offs and forced into late-term abortions, the indignity of "menstrual monitors" and the status of "illegal" children denied ration coupons and schooling.

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Chinese demographers say the distorted family structure undermines support for the elderly and has led to a 20 per cent surplus of boys over girls, leaving a volatile army of frustrated single males. The Politburo refused to listen. Harvard professor Martin King Whyte said the policy had become "sacrosanct", frozen by bureaucratic inertia.

The long-awaited reform eclipsed the launch of the Communist Party's latest five-year plan, intended to close the chapter on a series of errors and policy pirouettes over the past 12 months that have shattered global confidence in Chinese economic management.

The sketchy communique, rich in praise for Xi Jinping, speaks of a "moderately well-off society" by 2020, doubling per capita income from 2010 levels. The plan is to lift China towards "high-end" industries, moving to a "lean, clean and green" economy driven by consumer growth and services.

But first China must break the stranglehold of the state-owned industrial behemoths, the patronage machine of the regional party bosses and a bottomless pit of wasted credit. A cull of these beasts was announced with much fanfare at the third Plenum two years ago, when the party vowed to give market forces the "decisive role" in the economy. It was never, in fact, executed. Vested interests have put up a heroic resistance.

Plans to let farmers trade land scarcely got off the ground either. The feudal Hukou system trapping peasants in their villages lives on.

Premier Li Keqiang, a realist, has warned this five-year plan is the last chance for China to grasp the nettle of market reform and avert a slide into the "middle income trap".

He allegedly told party leaders the new growth target is 6.53 per cent, a strangely precise figure that raises as many questions as it answers.

Few economists believe the data, in any case.

This is lower than the 7 per cent number floated by President Xi Jinping on the eve of his visit to London this month, and suggests there is still a serious dispute at the top of the party over strategy.

- Ambrose Evans-Pritchard, Daily Telegraph

Millions of smaller pictures of pain and human suffering

After 35 years, China has announced that it will abandon its one-child policy, apparently over concerns that the country's low fertility rate would create a crisis that eventually could threaten the legitimacy of Communist Party rule.

But behind that big picture are millions of smaller pictures: the individual lives touched by the one-child policy and the human suffering it caused.

Although they were not endorsed by the Government, forced abortions and compulsory sterilisation had been a part of China's one-child policy since the 1980s.

Growing anger about the practices led Beijing to push for less coercive measures in the 1990s, including family planning methods. But though the national Government may have prohibited these practices, local and provincial officials implementing the policy frequently did not pay heed, because helping to keep the birthrate low was often a path to a promotion.

In 2005, farmers in the city of Linyi told the Washington Post that local authorities raided the homes of families with two children and demanded that at least one parent be sterilised. Pregnant women who already had two children were rounded up for abortions. If people tried to hide, their relatives were jailed.

"My aunts, uncles, cousins, my pregnant younger sister, my in-laws, they were all taken to the family planning office," one woman who was pregnant at the time said. "Many of them didn't get food or water, and all of them were severely beaten."

This woman eventually had her fetus aborted. She was subsequently sterilised, too.

Such operations were often carried out by staff with little or no medical training, leading to various side effects.

Cases of forced abortions were reported as recently as 2012. That year, a pregnant woman was dragged to a hospital by authorities in Shaanxi province and forced to have an abortion because she could not pay the US$6300 ($9360) fine imposed for having a second child. After photos of the mother - who was seven months' pregnant - on a hospital bed holding the corpse of her daughter were posted on social media, outrage spread across the country.

Initially, local authorities said the woman's abortion had been carried out "according to the law". An investigation deemed that the late-term abortion was a serious violation of national policies. The woman's husband was eventually given about US$785 as compensation.

Those who sought to draw attention to these practices risked the wrath of local authorities. Perhaps the most famous is Chen Guangcheng, a blind "barefoot lawyer" who filed a class-action lawsuit against authorities in Linyi for their use of forced abortions and sterilisations in the implementation of the one-child policy. Chen was later jailed for four years in what was widely seen as a punishment for his legal action. Even after his release, he and his family were placed under house arrest and faced repeated violence.

Chen escaped his house arrest in 2012 and sought shelter at the United States Embassy in Beijing. He now lives in the US, though he has repeatedly complained that his family continue to be persecuted.

The one-child policy had a profound effect on the lives of ordinary Chinese. Notably, in a country where sons had long been favoured in rural communities, a problem of female infanticide swiftly developed after the policy was implemented. One report suggested that at least one million babies were killed in the first 10 years of the policy, most of them girls. "I loved my daughter," one farmer who killed his child told the Post's Michael Weisskopf in a groundbreaking 1985 article that addressed the problem. "But sooner or later she would get married and leave me for a husband. I would have supported her for 20 years for nothing."

Later, despite Government opposition, parents would use sex-selective technologies to ensure they had a male child. One widely cited statistic suggests that up to 95 per cent of the children in Chinese orphanages are female.

This has had a remarkable effect on Chinese society. According to the latest Census, men outnumber women by at least 33 million. Even recent birth sex ratios remain skewed, with 115.88 male babies projected for every 100 female babies in 2014 - one of the highest ratios in the world. The problem is likely to get worse: It has been estimated that there will be a surplus of 40 million to 50 million bachelors in China throughout the mid-to-late 21th century. That figure leads experts to worry about the future stability of the country - polyandry has even been mooted as a potential solution to the problem.

And whatever their sex, most children born in China since the one-child rule went into effect in 1979 have lived a life without siblings. As their parents get older, the strain of being an only child has become clearer - in China, the generation of single grandchildren born of two parents and four grandparents has been dubbed the "4-2-1 phenomenon". The financial strain on these children as their family grows older is a huge problem.

For the parents, who place all their hopes for the future on a single child, the death of that child can be especially devastating.

A 2009 study by the state-run Chinese Academy of Social Sciences estimated that more than one million parents in China have lost their only child.

"Who will take care of his tomb after we are gone?" one parent whose son died in a car accident told the Post a few years ago. "Who will take care of ours?"

- Adam Taylor, Washington Post