STAFF STUDY PROJECT #7 THE POPULATION PROBLEM IN A COMMUNIST CHINA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01082A000100030007-0
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 10
• Document Creation Date: December 9, 2016
• Document Release Date: July 31, 1998
• Sequence Number: 7
• Publication Date: August 10, 1949
• Content Type: STUDY

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COPY
FAR EAST/PACIFIC BRANCH
OFFICE OF REPORTS AND ESTIMATES
CENTFAL INTELLIGENCE AGENCY
STAFF STUDY PROJECT +7
WORKING PAPER
NOTICE: This document is a working paper, not
an official CIA issuance. It has been co-ordina-
ted within ORE, but not with the IAC Agencies.
It represents current thinking by specialists in
CIA, and is designed for use by others engaged
in similar or overlapping studies. The opinions
expressed herein may be revised before final and
official publication. It is intended solely for
the information of the addressee and not for fur-
ther dissemination.
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1. Summate'
The incontainable pressure of the Chinese porulation on the limits
of subsistence tends to negate all efforts to raise living standards for
the remainder of this century. Any temporary improvement in well-being will
be quickly reflected in a tall of the death rate to a level far below the
birth rate. The resultant population expansion eill tend, by reducing per
capita income, to effect a return to subsistence standards. Ultimately, the
.potential for population growth may be reduced by a fall in the birth rate.
The fairly uniform record of demoeraphic statistics for other nations, however,
indicates that the fall in China's birth late, for the remainder of this century
at least, is not likely to counterbalance the fall in the detth rate.
The history of Japan's development, encouraged in large part by vigorous
government direction, suggests that the demographic factors Alich render dif-
ficult the elevation of living standards in China need not debar the building
of an industrial comelex. A Communist government in China will probably attempt
to direct as large a part as possible of the nation's labor into the production
of capital geode or into the production of commodities ehich can be exchanged
in foreign trade for capital goods. The allowed output of consumption goods
will set the bounds of possible poeulation increase. The industrialization
proeram of the Chinese Communists, it vigorously executed, will thus tend to
limit population expansion rather than be limited by it.
20 ifieaalkma.LEuzaLY.oiallixial_awadards
ae Ih2.12141.mg-aall.1.4k:a_la_gLiaa
China's high birth rate and high death rate constitute the core of her
population problem. Aitnough reliable vital statistics have not been recorded
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for the country as a whole, the evidence of special surveys in local areas
indicates that the birth rate is probably in the neighborhood of 40 per thousand
(that is, 40 births each year for every thousand persons in the population); the
death rate has probably averaged a little less. .These rates are from two to
three times as high as those which have prevailed in recent years among the
economically more advanced nations of the West.
The extremely high birth rate in China threatens continuously to expand
the population beyond the limits which the economy can sup,ort at even mere sub-
sistence standards. The necessary consequence is the high death rate, the
visible manifestation of the inexorable checks on population growth imposed by
the limits of subsistence. The efficacy of the death rate in braking population
growth, however, varies from year to year. Droughts and floods presage an in-
crease in deaths; good harvests foretoken a decline in the number of people who
will die during the year. Since the high birth rate remains relatively stable
from year to year, the necessary result of a temporary improvement in living
conditions is to increase the pressure of population on the land and effect a
reversion to subsistence standards. It is this unique dependence of the death
rate on economic conditions in the face of the high and comparatively invariable
birth rate that apparently precludes a lasting improvement in individual well
being.
A sieple numerical example will illustrate the force of population
pressure in blocking the improvement of living standards. The immediate effect
of improved living conditions would be to lower the death rate, say to 25 per
thouzand. If the birth rate were to stay constant at say 40 per thousand, the
result would be an annual rate of natural increase of 15 per thousand, a rate
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that is not unlikely of attainment and is in faet lower than that which pre-
vailed among the Chinese in Taiwan under Japanese rule. A population that
keeps increasing at the rate of 1 percent every year doubles itself in less
than half a century.. The apparently attainable 11 percent annual inerease
would thus bring the Chinese population to approximately a billion by the end
of this century, or very nearly half the present population of the earth.
It is this amazing potential for population grosth that renders so un-
promising any measures designed to effect an appreciable rise in Chinese living
standards. Rising incomes bring a fallina duath rate; and a fall in the death
rate, oven if only to a level twice that prevailing in sestern countries, leads
to a phenomenal population expansion.1
In large part, the demograehie factors operative in China today resemble
those which prevailed in the .est at the buainning of the Induetrial aevolution.
Like China today, Lngland in the eishteenth century was a country with high
birth and death rates. Althoush the historical data are fragmentary, the bout
available evidence is that the death rate in .4ng1and just before the Industrial
1The situation contrasts sharply with that which exists currently in the
Western nations. The death rate in the United States, for example, is now a-
round 10 per thoueand. In a stationary population, the maintenanee of this
rate would signify a life expectancy at birth of 100 years. If allowance is
made for the deaths which unavoidably occur among infants and young children,
the rate signifies that the typical adult would live to be well over 100 years
old. Clearly, the death rate in the United States cannot be astreciably de-
creased; its present loe level merely reflects the temporary circumstance that
an unusually high proportion of the population is concentrated in age groups
which suffer relatively low mortality. As the individuals in these age groups
become older, the death rate in the United States will necessarily rise. No
margin exist in this country, as in China, for a sharp drop in the death rate
and for the consequent expansion in population.
R2Sae
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Revolution was at least 35 per thousand and probably higher. The birth rate
was higher than 35 per thousand, but not enough so to produce avery marked
population growth. Ay 1800, the death rate had fallen to possibly 25 per thou-
sand; with her birth rate still higher than 35 per thousand, England experienced
the rapid population increase that tended to deny to most of the people the
fruits of increased productivity. ?then Malthus developed his theory of popu-
lation at this time, the number of people in England was increasing at a rapid
pace, and the economic condition of the majority of urban and rural dwellers
seemed not at all improved from what it had been in preceding generations.
b. jeaLII_Tvepeeeetee. for eetin...1222ellierttlatttatta
The ultimate resolution of China's dilemma lies, of course, in a decline
of the birte rate. The experience of the economically advanced nations does
sueeest that a falling birth rate will follow industrialization. The fall in
the birth rate, however, has typically been delayed for decades after the drop
in the death rate as initiated. In England, for example, the birth rate did
not begin its downward course until about a century after itaealancHaereeefe-itartaka-
14).
Industrial revolutionA In Japan, which successfully telescoped the Western
experience into a shorter interval, the downturn in the birth rate followed
the inception of its industrialization be about half a century. Even if the
favorable assumption is bade that China's demographic cycle 4111 follow the
Japanese rather than the English pattern, it _follows that no decline in China's
birth rate Gen be looked for in the twentieth century. Indeed, it is very
likely that, for the first generation or so, the effect of increased productivity
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kw, may be to raise rather than to depreas the birth rate. Infaat mortality hae been
particularly extenaive in China. Any improvement in living conditions that effect-
ed a significant decline in mortality among infants and young children would in
a generation hence increase the proportion of the population consisting of women
of child bearing age. The resultant rise in the birth rate would reflect this
temporary alteration in the age distribution of the population.
Even if the Chinese Communists can quicken the tempo of social change and
achieve a falling birth rate before the end of this century, it is not likely
that they oelld immediately counterbalance the fall in the death rate. The fair-
ly uniform experience of other nations in this respect suggests the initial in-
adequacy of a falling birth rate to prevent a high rate of natural increase.
4hen the Swedish birth rate began its stoady decline around the middle of the
nineteenth ?entry, the rate of natural increase (that is, the birth rate minus
the death rate) was about 11 per thousand. For the next half century, the feeling
birth rate wee fully offset by the fallins death rate; just before eorld har I,
the rate of natural increase as till in the neighborhood of 11 per thousand,
Data for other countries similarly indicate no appreciable decline in the rate
of natural increase for a long time after the birth rate begins to fall. The
logical inference to be drawn from demographic history seems inescapable:
dustrialization and increased productivity in China muld gr,atly expand her
population throughout the remainder of this century and probably for a good
part of the next. EOM food, more clothing, more shelter mean the survival of
more Chinese, so that the share for each remains little more than enough to
support life at minimal standards. Eventually, the Chineee, like other peoples
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before teem, will find escape from their dilemma in a falling birth rate; but
insofar as the experience of other countries can serve as a guide, it appears
unlikely that China's birth rate in the twentieth century will begin ti fall
as fast as her death rate, or indeed that it will even begin to fall at all.
3. 212-Alau.1.2a-Prokl2m and the 1-.1T2Pets 19.17-41141ALI...alet,
The eifficultioe that the Chinese Communists will face in raising
living standards do not preclude success in creating aa industrial comjex.
The history or Japan lends empirical eup_ort to the thesis that low living
standards do not debar Industrialization. When Japan was opened to the Jest in
the middle of the last century, the mass of Japanese lived much like the Chinese
today, with earnings barely enough to maintain subsistence standards. The
rapid industrialization that followed the opening of japan is testimony in large
part to the vigor and energy of government direction, The government of Japan,
undertaking the establishment of state factories, initiated the beginnings of
such important industries as textiles, shipbuilding, cement, and brickyards.
When the government later turned the e factories over to private ownership, they
were eroducing large profits and providing the incentive for further investment.
Besides direct state ownership, the Japanese government also emFloyed other de-
vices to hasten the pro rram of incustrialieation. Governeont purchase of stock
that received lower dividend rates than privately owned shares, relinguiehment
of dividends on government shares for the first few years:, tariff protection,
and active subsidization out of government funds were some of the measures em-
ployed with good effect to promote a rapid industrial development. Within half
a century, Japants industrialization (along with a population increase of some
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160 70 percent) was sufficiently advanced to support her status as a major military
power. The government was somewhat less succeosful in raising the standard of
living. Although the economic well being of the individual Japanese improved
during this period, typical living standards remained far below levels in West?
ern societies.
In a Communist China, the speed of industrialization will be governed,
even more than it was in Japan, by the energy and efficiency of government
direction. A Comeunist eoverneent can, at least as much as any other, control
the course of national production. This power of control is not unlimited;
the most auteoritarian :overnuent will be restrained by the political impracti?
cability of starving the people to hurry the pace of capital accumulation. But
there remains nevertheless, much scope to the Communists in the formulation of
their plans to divert as much labor as possible from the production of consumer
goods to the production of capital good*. During the war against Japan and in
' war
the civiVagainst each other, both Aationalists and Communists conscripted part
of the nation's youth into the armed forces and directed much of the country's
output of food: clothing, machine, and other goods into the military sector
of the economy. A Communist China may be equally effective in directing as
much of the nation's output as possible to uhe investment sector, that iu to say
to the manufacture of capital goods directly or to the production of commodities
which can be exchanged in foreign trade for capital goods.
In this diversion of output to the investment sector, a Communist govern?
ment will be in effect forcing the people to save, thus thwarting any temporary
rise in living standards that might encourage too rapid population increase,'
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The part of the nation's output which remains for imeediate consumption will
eet the limit for population expansion. The industrialization program of the
government will thus operate as MI active factor to contract further the limits
set by nature to population growth. Admittedly, this bald statement that popu.
lation growth will be causally dependent on the industrialization program neey
be too categorical. To a dere, the demands of a growing population will
affect the government's planning decioions. But if pursued with a certain
measure of zeal, possibly with the ruthle.sness sheen at times by the Russian
Comeunists, the industrialization program of the Chinese Gomeunists will tioa4
as much to limit population expansion as to be limited, by it.
The iarr prompted by the foregoing conelderitions is that China's
population problem may possibly slow doen but need not prevent industriel develop?
ment. The speed with which this development takes place, if it takes place at
all, will defend to a large extant on other thaa demearaphic factors. The in?
cidence of floods, droughts, and other natural disasters affecting harvests,
for example, will determine hoe much can be exported in particular years to
pay for imports of capital goods. Another factor will be the demand in foreign
countries for China's exports; a declining demand eould reduce her buying power
for capital equipment. h third factor affecting the pace of industrial develop?
ment will be the particular channels into -which the CoLmunists direct that du-
yelopmento investrent in the light coneumer goods industries will produce
quicker profits than more ambitious projects to build up heavy, capital goods
induetries or to extend transport facilities to remote areas. Thus, in the
early stages of industrialization, em;hasis on light Lndustriee, by providing
profits which can be reinvested, can quicken the speed of capital accumulation?
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Given the favorable concurrence of these and other factors which will
proMote industrialization,- and given a Communist government that will not vitiate
Its advantages by.natoriaws- administrative inefficiency, an industrial plant will
bo'bUilt in China as it has already been built in tho once backward Countries
or Japan and-Russia. The end resat will be a Strategio advantage to. China de.
riyed framthe.Combination of a large population and an advanced stage of
dastria3.4mvappmant. A Ohina-which cJuld industrialize as fast as Japan. or
Russia would be by the close of this oentury a nation with more manpower than
a4y other and with the moans to make that manpower njlit,ari3.sr effective.
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