The Impact of the Hunan Scandal on China's Adoption Program

This essay was published orginally on our subscription blog in 2012, but seeing some recent comments by waiting families made me think the info might still be of some relevance to interested families.  
________________________

I was reading a waiting family's blog last week, and saw a discussion about how slow the CCAA is referring children.  The waiting families were understandably frustrated that the wait has increased from a year to over five years since many of them have sent their adoption dossiers to China, and with only a small number of referrals taking place each month, many asked the question "Why?"

Answers have been thrown out to explain the increased wait time, running the gamut from the 2008 Olympics to a decrease in abandonments due to increased economic affluence and access to abortion.  Some uninformed families believe that children are still coming into the orphanages, but that the CCAA has implimented a quota system that keeps them there, hidden from the world, and unadoptable.  All of these ideas can be tested, drawing on evidence from China's orphanages.  By focusing on the data from China's main providers of internationally adopted children, Guangxi, Guangdong, Hunan and Jiangxi Provinces, we can test each hypothesis to see if it stands up to scrutiny, and ultimately determine what exactly caused China's program to so radically change over the past ten years.

First, let's begin answering the question of why by answering an even more basic question:  "When did the wait time begin increasing?"  After we have determined that fact, we can go on to address why.


 DTC Wait Times

The first clue as to why jumps out when we look at the wait time graph above.  Through most of 2003, the wait time for families ranged from eight months to fourteen months, with the overall trend being a decline in wait times.  Wait times in 2004 were very flat, ranging from six to eight months, a situation that continued through 2005.  It isn't until January 2006 that wait times break out to the upside, climbing to nine months, a trend reversal that saw wait times reaching 41 months in August 2009 and 72 months as I write this.

 This graph alone eliminates most of the "macro" reasons for the slowdown in referrals.  While there is little question that abortion and increased economic wealth have a global impact of abandonments, these changes occur slowly, over years, if not decades, not suddenly in the space of a few months as we see above.  Clearly something happened in late 2005 or early 2006 to cause wait times to increase, for the graph above points to a dramatic change in the "supply-demand" equation of China's program.  Either the number of children being referred declined in January, or the number of families submitting files to adopt increased sharply.

I say "supply-demand equation" because, at its most basic, that is what the wait time represents.  It is very much like a line at the corner coffee shop.  The shop can produce a limited amount of coffee each morning. If a Cappuccino machine breaks, the processing of customers begins to slow, and the line of waiting patrons increases, and further increases if morning commuters continue to get in line.  If an employee is particularly adept one morning at making the brew, he is able to serve the shop patrons more quickly, and the line shrinks.

 Imagine that the China program is represented by a single day at the coffee shop.  Obviously one would expect the number of abandonments to change due to macro influences like abortions and rising incomes, but since these changes would occur over a very long period of time, they would not impact the program in the extreme short term.  Such changes would be analogous to a rise in coffee prices -- they would have little impact on the number of people coming into the shop on any given day.

What we see in the graph above is akin to the complete shutdown of nearly all the coffee makers in the shop.  Only one machine continues, and the line of customers has begun to increase out the door and down the block.

"But," one might ask, "how do we know if the machines have broken down, rather than a bunch of new patrons are getting in the line?  Perhaps the 'supply' has remained constant, and the number of customers has simply increased."

A view of total adoptions from China shows that the number of adoptions being completed peaked in 2005, and fell by more than half by 2008.

 Clearly this is not a demand problem, since the patrons for China's adoption program are still stretched out the door and down the block.  The falling adoptions can only be a result of falling supply -- China's program experienced a sharp change in how much coffee it can produce, or to make it more accurate, how many children are available for adoption.  We will focus our attention on four Provinces in the discussion that follows: Guangxi, Guangdong, Hunan and Jiangxi Provinces.  These are the four largest adopting Provinces, accounting for over half (57%) of all submissions in 2009.



 One thing becomes quite clear when comparing the orphanage submission numbers above with the wait time graph at the start of this essay -- they are nearly perfectly inverted.  In other words, when submissions were at their peak in 2003, the wait time was at its minimum.  When submissions dropped in 2006, the wait times increased as a result.  This, of course, ignores the increasing demand seen over these years, but clearly something happened between 2005 and 2006 to drastically change the number of children entering the orphanages. 

So, what game-changing event occurred around January 2006 that would change the equation so dramatically?  Possible explanations include China's signing the Hague Agreement in September 2005, and the Hunan Trafficking scandal in November 2005.  No other event that I am aware of took place that would have such a substantial impact on China's orphanage program in such a short time frame.

If we zoom into 2005 and 2006, we can see if there is a specific month when things changed.  This would allow us to decide if signing the Hague Agreement was the cause, or if the Hunan scandal was at fault.  Fortunately, we can break down the findings for these four Provinces by month:



 Here one can graphically see that all four Provinces (Guangxi = Blue; Guangdong = Pink; Hunan = Yellow; Jiangxi = Rust) saw their finding rates substantially fall beginning in December 2005, with another steep drop being seen in February 2006.  By April 2006, submissions from the top four Provinces had declined from a little over 300 children per month to about 100, a decline of over 66%.

Other Provinces saw similar declines. While the Hague Agreement was ratified in September 2005, the Hunan scandal broke on November 25, 2005, with the trials taking place in February 2006.  Both events were accompanied by substantial national press attention inside China.  The timing of these two scandal events coincides perfectly with the decline we see in findings in our four Provinces.  Thus, it seems clear that the scandal is the cause for the slow-down, and not the Olympics, signing of Hague, or any of the other macro forces proposed.

Besides the slowdown in findings, what other characteristics of China's program changed concurrent to the Hunan scandal, and after?  One significant change occurred in the gender ratio of the children submitted. While overall findings declined after 2005, the decline was limited exclusively to females; male findings continued increasing unabated, as they had since 2000 (2011 is under-represented since many findings from 2011 appear in 2012 finding ads).



 In February 2006, a few weeks before the trials for the Hunan scandal directors was set to begin, the CCAA met with the major orphanage directors in Tianjin.  At this meeting, the focus was encouraging directors to submit as many files as they could, even special needs children that the directors may have felt were unadoptable before the scandal.  As a result, submissions of SN children began to increase.  Many of these children had been found many months, if not years before the scandal broke, and were residing in the orphanages, viewed as unadoptable before the February meeting.  But following the meeting, directors began processing the paperwork for these children.  When one graphs the average time between the finding date and the finding ad publication date from 2000 to 2011, one can easily see how the submission of these older children began to increase average "lag times" beginning in 2006.



Between 2000 and 2005, the orphanages published finding ads (the first step to an international adoption) within about 100 days of finding a child.  Hunan Province was the most "efficient", publishing ads on average less than 80 days after finding, while Guangdong was the least "efficient", averaging about 150 days between finding and finding ad publication.  "Efficiency" declined sharply in 2006, as orphanages began submitting children that had been found long before for adoption.  Guangdong's orphanage "lag time" hit a peak of almost two years in 2009 as they responded to the CCAA's pressure to submit previously unadoptable children (This discussion makes the assumption that the finding dates listed are accurate.  There is evidence that such may not be the case in all instances, and that children, particularly older children, have their finding dates artificially altered to much earlier. I have not seen evidence that this is widespread however).

Speaking in generalities, the impact of the Hunan scandal on China's program can be summarized in the following ways:

 1)  Prior to the scandal, the children submitted for international adoption by the orphanages was overwhelmingly female.  Although male children have been increasing in total numbers since 2000 (displaying a trajectory that one would expect from changes in Chinese culture on a macro level), the extremely high number of female submissions resulted in a gender ratio in excess of 90% female through 2005.

After the scandal, the number of female submissions declined substantially across China, while the number of male submissions held steady or increased.  This has resulted in the gender ratio falling, with the current ratio approaching parity.  Since male findings have increased, it is the sharp drop in female submissions that is driving this dramatic change in ratios.

2)  Prior to the scandal, special needs submissions were relatively rare, with over 95% of children adopted classed as "healthy".  With the decline in overall findings, and the push by the CCAA to submit "warehoused" special needs children, the number of special needs adoptions has increased dramatically, both in real numbers and as a percentage of total adoptions.  These increases are a result of orphanages submitting children found in prior years (increasing the average "lag time" between finding and finding ad publication), and an increase of findings overall.  In other words, orphanages are "finding" more special needs children now than before 2006.

There is no doubt that the collapse in adoptions from China after 2005 is a result of the Hunan scandal. Reasons proposed by members of the adoption community, including China's artificially reducing adoptions in anticipation of the 2008 Olympics, China's signing of the Hague Agreement, or the establishment of submissions quotas, lack any evidence.  Additionally, orphanage directors directly refute these notions, plainly stating that there is no limits imposed on orphanages on the number of children that can be submitted to the CCAA for adoption.  Steps taken by the CCAA since 2005 also contradict this idea.  The increase in adoption donation, the change in domestic adoption laws, the recent broadening of "orphan" definitions, are all intended to increase the number of children coming into orphanages for international adoption.  While adoptive families hear that the Chinese government is intent on lowering the number of children adopted, all of the evidence shows the opposite -- that the CCAA is desperately trying to increase the size (and revenue) of the program.

The only question that remains to answer is why the number of children found across China fell so sharply in December 2005 and February 2006.  Was it because orphanage directors realized that many of them were breaking the law, and stopped their incentive programs?  Or was it because the publicity surrounding the scandal actually altered the abandonment frequency across China?

We will save this question for a future essay.