This paper examines the impact of various population policies in China, in particular, how to increase the fertility rate and reduce the age dependency ratio. The investigation carried out involved the identification of relevant factors, the establishment of causal relationships between factors and the building of a causal loop diagram, and subsequent conversion into a stock and flow diagram for running simulations. Data collected were from newspapers, published reports, and official government websites. The results obtained from the simulations revealed that the newly implemented two-child policy would most likely be ineffective in alleviating the issue of ageing population in China. Sensitivity analysis carried out to identify potential points of intervention revealed two possible measures. Both measures were shown to be effective in increasing the Actual Fertility Rate, and also in slowing down the increase in Aged Dependency Ratio. Hence, it is recommended that the Chinese government introduce alternative measures, such as giving cash bonus to families that give birth to a second child, or implementing policies that reduce the cost of healthcare services, in order to ensure that its population is productive, and continues to be so in the future.
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