Predicting the Future of China Adoption

A cursory view of nearly every adoption blog and newsgroup shows that the air is abuzz with speculation and rumors of what the future holds for China adoption. Although there is significant data and history on which accurate assessments can be based, it seems that nearly everyone is at a loss to explain why things are changing so dramatically.

As adoptive families, it is helpful to assess the current situation with tools learned in basic Economics 101. It is clear that China's international adoption program is experiencing a supply "crunch", which is to say that there are too few children available for immediate adoption to waiting foreign families. The immediate cause of this crunch was the Hunan stoppage that began in December 2005, and is just now ending. But a longer view shows that it has been building for years.

It is a misperception to think that this situation appeared overnight. In fact, a glance at the Yahoogroups dedicated to the various orphanages shows that each year orphanages have been added to the International Adoption program to bring in additional supply of children. This was done to compensate for the falling abandonment rates in the existing member orphanages. The goal is to keep the supply as constant and predictable as possible, and it has worked pretty well.

It is well-known that three Provinces provide a majority of the children adopted through the IA program -- Guangdong, Jiangxi and Hunan. When Hunan adoptions were paused in late December 2005, it took 20-25% of the adoptable children out of the supply pool. China's options were limited, especially since this was a very temporary problem. It was forced to let the "demand" back up, leading to longer and longer referral wait times. The DTC to referral wait times now stand at approximately 14 months.

With Hunan Province now coming back on line (we should see substantial Hunan referrals in the next month or so), the supply-demand equation should normalize. But China still faces a demand imbalance. Hunan doesn't totally explain the longer DTC referral wait times, just a portion of it. Thus, China is taking further actions to bring things into line.

It seems likely at this point that one step China will make in the near-term is the dramatic reduction, if not outright elimination, of the singles program. China has had ambivalent attitudes towards this program for years, and has taken periodic steps to reduce the number of singles that could adopt. This ambivalence stems from the cultural belief that children should be raised by two-parent families, coupled with the desire that China's children not be raised by homosexuals. Letters of Declarations (required by single applicants declaring their heterosexuality) aside, it is widely believed that gay parents continue to apply for adoption. Thus, it should come as no surprise to anyone that the first step to reducing the number of families permitted to adopt would be the elimination of the singles program (A compromise solution to outright elimination of these families would be the requirement that they apply for a waiting child).

Additional restrictions seem likely, perhaps health restrictions, income requirements, lowering upper-age limits for parents, and other means of reducing the number of families eligible to adopt. Additionally, new orphanages will probably be brought into the IA program. These changes are intended to bring the supply-demand equation back into balance.

But the referral wait time will not be brought back below 12 months, the stated goal of the CCAA, because simply put the longer wait times work to China's favor. As wait times increase, more families look to alternative options, and one option that will be presented in ever more favorable light is the waiting children program. Expedited referrals will be used to improve the attractiveness of this program, and many families will opt to adopt a Special Needs child, thereby reducing the demand for the healthy young children that are becoming increasingly more difficult for China to supply.

If viewed through the prism of simple supply-demand models, the events of the last 12 months become understandable. Often as waiting families we focus on each months referals, feverishly projecting the past to try and ascertain the future (one website has projected the wait time for a family submitting their paperwork today at 2 1/2 years!). By stepping back, we can see the larger picture, and see how the steps being taken by China will impact how adoptions are done. With most of China's orphanages now in modern, third-generation facilities, the "need" for monies derived from the IA program is diminishing. It still exists, and for that reason the IA program will continue. But we must realize that it is China's right, and perogative, to alter the program as they see fit to insure the life-long well-being of her children.