Imagine being pregnant with a second child in a country with a one-child-per-family limit. The penalties for violating the policy are severe-forced abortions, sterilizations, and crippling fines. This was, of course, the grim reality for many Chinese citizens before October 30, 2015. That day, China’s Central Communist Party issued a short announcement that all Chinese couples will be allowed to have two children, ending 35 years of the notorious one- child policy.
The official reason for ending this policy lies in its troubling effects on China’s demographics: After decades of successfully curbing population growth, the one-child policy has caused China to become a country with a rapidly aging population (that is enjoying more longevity) and a corresponding shrinking young work force, which together put enormous pressure on the country’s labor industry and public service resources. Commentators have overlooked the fact that the new two-child policy may also have important implications for President Xi Jinping’s anticorruption crackdown (covered from different perspectives here, here, and here ). The one-child policy (perhaps inadvertently) fostered at least two forms of corruption, and the end of that policy will therefore make a non-negligible contribution to reducing corruption in China.
Both forms of corruption associated with the one-child policy derived mainly from the “social support fee,” which was officially defined in 2002 as “a fee paid by citizens giving birth extra-legally, in order to compensate for the government’s public goods spending , adjust the consumption of natural resources, and protect the environment. “(The fee actually had been in force since the 1980s, but was renamed several times.) After various provincial and local government tax reforms, the social support fee became one of the only sources of revenue over which local governments had complete control, which gave rise to two significant forms of corruption:
- First, the one-child policy and the social support fee-system in particular encouraged bribery, bribery by Chinese citizens to avoid paying the fees, which was often very high. Although some official reports claimed that the fee was to be calculated as a “fraction of the average annual income of city residents or annual cash income of peasants,” in reality the fee amounts often deviated from this seemingly rational formula. In many locations, the fees were exorbitant. (In Beijing, for example, the cost of an “extra” child started at around US $ 40,000, and went as high as US $ 176,000). Fees also varied wildly by locality, and were especially high (relative to average income) in cash-strapped rural areas with weaker revenue-generating abilities, where there have been multiple accounts of government officials manipulating the fee amount to reduce government deficit. Naturally, not all citizens could pay such high fees. Those lucky enough to have the “right” social ties were able to secure discounts, but for the less well-connected, it was not uncommon to bribe officials for documentation for the second child, with typical bribes ranging from US $ 1,000-US $ 31,000- large amounts for most Chinese families, but still significantly less than the official fines.
- Second, the provincial government control over social support fee system-coupled with an extreme lack of transparency in how these fees entered and exited government coffers-gave rise to widespread embezzlement and other forms of misappropriation. The best evidence for this comes from the large discrepancies between the provincial Departments of Finance records on the amounts of these fees collected every year (records that the provincial Departments of Finance were required to keep), and the fee amounts reported by the provincial family planning commissions, which oversaw the program and the collection of the fees. The mismatches in these records indicate that an astonishing percentage of the collected fees were unaccounted for. For example, in Guangdong, the province’s Department of Finance reported collecting around US $ 421 million in social support fees in 2013, while the corresponding family planning commission reported only US $ 235 million. The difference was even wider in more rural regions: in bucolic Yunnan, the commission’s reported figure was only 10% of the amount treasury official, which meant 90% of the fees were unaccounted for. Although it is possible that some of this is due to poor record-keeping (a perennial problem in local governments), there are good reasons to believe that the main explanation is not so innocuous. In Yunnan, citizens have reported that officials misappropriated the collected fees to pay for personal expenses, while in Guangdong, a lawyer involved in pro-transparency campaigns claimed that 95% of the fees collected in Guangdong were used to give provincial and local government officials a salary boost and other perks. And more broadly, some authorities have openly acknowledged that they allow the individual family planning commissioner who collects the fees to keep a portion as personal income.
For these reasons, the elimination of the one-child policy eliminates a potent source of corruption. While families would still need to pay a social support fee for a third child, relatively few Chinese families today want more than two children, meaning that as a practical matter, this particular source of revenue-and corruption-has dried up now that the one -child policy is no more.
Of course, this naturally invites the question of how local governments will make up the expected revenue shortfall, now that they will no longer be collecting significant social support fees, as well as the related question of how the government officials who previously misappropriated received significant illicit income – from embezzled social support fees or bribes paid to avoid these fees – will deal with the elimination of this income stream. It is possible that corruption will simply reappear in another form, or that the government will promulgate tax reforms to give local governments more control over other sources of revenue. This is all just speculation. However, one thing is certain: the changes in China’s reproduction policies will have significant, and largely overlooked, consequences for the country’s ongoing fight against corruption, particularly at the provincial level.