China officially ends its decades long one-child policy in October. Photo: CFP

There's a new greeting in Shanghai. Instead of asking "How are you?" couples are asking "Are you going to have a second child?" In tea houses, coffee bars and around water coolers the conversation has invariably been turning to the decision announced at the end of October to officially end the country's one-child policy.

More than 35 years after China introduced its one-child policy, the restrictions have been lifted, leaving behind a unique single-child generation, who are now mostly in their 20s and 30s and struggling about making this choice in life.

Over the past six months 34-year-old Yang Weiwei has been trying to conceive. She actually became eligible to have a second child after Shanghai announced in March 2014 that where one parent in a family had been the old child, the family was allowed a second child.

"A big family matters a lot to us because we love the closeness of a family," said Yang, whose first daughter is already a grade one student. Given that her husband was not the only child in his family, Yang had had to wait for years before the regulations were modified.

Added complications

But her age now adds complications to their plans for a second child. She has uterine fibroids and a polyp in her uterus and these can affect a pregnancy. "That's the price that a woman who has passed the ideal age for child bearing might have to pay," said Yang. "Things would have been very different if the regulations had been changed earlier."

Although she faces some serious physical challenges, Yang is determined to have another baby. But, in this city, the determination to have a second child or a larger family is not widespread.

A recent survey of 1,500 newlywed couples in the city, with an average age of 28, revealed that just 25 percent intended to have two children.

This survey reflects an earlier survey by Fudan University that showed only around 30 percent of city families who already had a child would consider having a second.

"Based on our study, after the change of regulations in March last year, as many as 90 percent of the families in Shanghai were allowed to have a second child. This final blow to the one-child policy could affect another 700,000 families here," said Peng Xizhe, the dean of the School of Social Development and Public Policy at Fudan University.

"But more than half of these families have parents aged over 40. We estimate that about 10 percent of these families will actually have a second child," he told the Global Times. "For the remaining 350,000 families, around 30 percent of them will plan to have children but this won't have a major affect on the population," he said.

One Shanghai mother explained her budget to the Global Times to show why a second child would be unaffordable for her. "Less than two years ago, we sold an apartment that entitled my daughter to enroll at an elite primary school in Pudong New Area," said the 43-year-old. Neither the woman nor her husband were single children.

"If we have another child, I would have been involved in the xuequfang (education-district apartment) issue again. And property prices today are nothing like they were 10 years ago. When I bought the two-bedroom apartment in 2003, it cost me some 200,000 yuan ($31,123). I sold it for 1.3 million yuan in 2013. But now the same property is priced at over 2 million yuan."

The cost of sons

Education is only part of the expense of raising a child. The woman, surnamed Zhuo, told the Global Times that she was lucky to have had a daughter. Other parents whose first child was a son daren't think about a second child. "What if they have another son? The cost of raising two sons is tremendously high in Shanghai because the families have to have properties for them to own when they marry and the price of properties here just keeps soaring."

Apart from the pragmatic financial aspects, Zhuo said there was also the question of her own capability of becoming pregnant again given her age. "The change has come too late. If it was five years earlier, it's likely that many of my peers would have taken it seriously."

It's not only practical middle-aged parents who say the new regulations have arrived too late - experts agree. "When the one-child policy was introduced, it was supposed to affect one generation. And normally a generation should last around 25 years. The end of the one-child policy should have come in 2005 - we are 10 years late," said Professor Peng Xizhe.

Professor Kirk Scott, with the Centre for Economic Demography at Sweden's Lund University, agrees, saying China's one-child policy should have been relaxed long ago. "The problem is that as life expectancy increases, the advantages of having few children become disadvantages. Now, every year fewer and fewer Chinese are entering the labor force here, but more and more are surviving an increasing number of years past retirement. This means that a shrinking labor force has to provide for an increasing elderly population," he told the Global Times.

While China may not have the extensive health care and pension provisions as Europe, the academic said there was still a pressing need to provide for the elderly. "Relaxing the policy earlier would have slowed economic growth somewhat, but made it easier to deal with the currently aging population," he explained.

Instant benefits

When the country implemented the one-child policy at the end of the 1970s, it did see some instant benefits. "Without the efficient control of population growth, China's economic growth couldn't have been that rapid," Professor Peng said.

"The so-called demographic dividend was formed because of the policy. But the cost of the rapid economic growth is quite huge. It has caused a serious aging issue (though aging is a certain trend, the process has been much abbreviated in China), a shortage of workers and pollution problems," he added.

Professor Scott said when researching China's history he had also seen the positive impacts that the one-child policy had had on the Chinese economy.

"This gave China a very advantageous demographic situation, where capital that was previously spent on children could be redirected toward production. Andrew Mason from the University of Hawaii estimates that fertility decline accounts for between 25 and 33 percent of all economic growth in East and Southeast Asia during the past decades," he told the Global Times.

However, more than 35 years later, the situation has changed. Professor Peng said currently the main workforce in the country is comprised of people in their 40s - those born in the 1970s. But after 2025, a workforce shortage will become apparent.

"There has already been a decline in the workforce but you won't notice this so obviously. Part of the reason for the current labor shortage is the excessive expansion of the economy, which means that the current extremely high demand for labor is abnormal. The surplus industries will have to be adjusted to be normal. That will reduce the demand for workers. For the time being, the decline in the workforce won't affect China's overall economic growth," Professor Peng told the Global Times.

However, 10 years later, the professor said it was not an optimistic view that the country's economy would remain intact after the drop in the workforce. "China's economy will face a severe test when the children born after the end of the one-child policy are too young still to enter the labor market."

Professor Scott also believes that China's economic growth will probably slow down due to less favorable demographic structures and he said the country will have to handle these challenges to figure out how to give the elderly a decent quality of life with fewer workers to support them.

The problem

The reluctance of families to have a second child could make the already disturbing situation even worse. The problem is now how to encourage more people, especially in the cities, to have a second child.

"I don't think the fertility restrictions are really needed, and definitely not in the cities," said Professor Scott, who believes the country doesn't need to limit the number of children a city family should have.

"As China develops and gets richer, birth rates will go down on their own. This is something we see everywhere and there is no reason to think that China is any different to the rest of the world," he said.

But, apparently residents in Shanghai face more economic pressures and thus are less willing to have second children. Professor Peng believes that in the current situation, the country will just encourage people to have a single extra child under the two-children regulation.

Nationwide, in many other places like some second- or third-tier cities, people are much more interested in having more children than their peers in Shanghai, according to Professor Peng. But even if that happens, he said the total number of extra babies born would not be significant.

"Across the country 91 million families can benefit from the second-child policy, with half of these parents aged under 40. If 50 percent of them want a second child, alongside some of the parents in their 40s who are willing and able to have a second child, there would be between 30 and 40 million more babies born as a result of the new regulations. For a country whose population stands at around 1.4 billion, this is really nothing," Peng said.

Some experts have suggested that the only effective encouragement to have more children is to offer subsidies. Liang Jianzhang, a leading demographer, said that in the developed world, countries allocate between 1 and 5 percent of their GDP to subsidize families to have babies.

More affordable

"We could learn from their approach. A family having a new baby should enjoy either direct economic subsidies or reductions in their taxes," said Liang, who added that urban planning also mattered a great deal - school enrolments should be made more accessible and affordable for all families.

"If we continue to plan cities based on the number of hukou (household registration) holders, we won't be able to change the fact that kindergartens and schools are scarce resources. We have to include the migrant population, which is comprised mostly of young people who are contributing significantly to the city's development, in the comprehensive urban planning scheme," Liang said at a financial forum this month.

Other Chinese academics have suggested that as much as 15 percent of the country's GDP could be considered for subsidizing families having new babies. However, the country's health authorities seem to be much more conservative, saying their next step will be gradually cancelling the approval system for families that want to have a second child.

Wang Pei'an, the vice minister of the National Health and Family Planning Commission, said after the announcement of the end of the one-child policy that the country would supervise birth registration services and ensure the procedures were simple and friendly. He said the government would subsidize the costs of birthing to boost the public willingness for having another child.