Li Tianhao has just given birth to a baby boy blessed with his mother's nose, his father's mouth and an impressive ability to sleep through even the loudest disturbance.

It is a skill the newborn will be fortunate to maintain as he has been born in Henan, the most crowded province in the world's most populous nation as the human family edged closer to the 7 billion mark.

Yet he will probably grow up alone. Although Henan last year became the first province in China to register its 100 millionth resident – giving it a population bigger than any country in Europe – it also claims some of the greatest successes in taming demographic growth through its family planning policies.

This has not happened by accident. Henan is one of the most environmentally stressed areas of China with a quarter of the water and a fifth of the land per capita compared to the already low national average.

Senior family planners say this justifies rigid restrictions. "The large number of people has put very big pressure on all resources, especially water," said Liu Shaojie vice director of the Population Commission in Henan. "Over 30 years of effort, we have put in place a systematic procedure for controlling the population. That has eased the impact on the environment. We are doing glorious work."

Many environmentalists agree that population control is essential if humanity is to move on to a more sustainable track, but how can this be done? China has gone further than any nation in trying to answer this question over the past 30 years. But both the means and the ends remain the subject of fierce controversy.

When the one-child policy started in the 1970s, Liu says, women in Henan gave birth to an average of 5.8 children in their lifetimes. Their counterparts today have less than 1.7. The change, he said, means 30 million fewer births – equivalent to preventing one every 30 seconds for three decades. And that is just in Henan. Across all of China, the government claims there would be more than 300 million more children without the family planning policy.

This policy was initiated primarily for economic and education reasons, but it is increasingly cited as an environmental blessing. According to Liu, the population controls have kept sulphur dioxide emissions down by 17.6% and the main source of water pollution by 30.8%. Without it, he says, the average person in Henan would have a third less land and a quarter less forest. It has also, he claims, prevented between 137m and 200m tonnes of carbon dioxide from entering the atmosphere.

Such extrapolations are questionable. The current measures were not put in place to save the global environment, but to redress one of the biggest errors made by Mao Zedong. The founder of the People's Republic was advised in the 1950s that China's population was growing dangerously fast, but he urged women to have more babies because, as he put it, they were like aircraft carriers launching fighter planes. Today, Chinese officials and scholars privately describe this as Mao's greatest mistake. If he had put in place a two-child policy in the fifties, today's one-child policy would not be necessary.

The description of the system as a "one-child policy" is misleading. Most married women in China have the chance to bear two offspring, but the entitlement to breed beyond a solitary child is determined by a complex set of rules that vary from province to province and are often applied differently from village to village.

Broadly speaking, urban couples are allowed one child, rural families can try for a second if the first is a girl and women from ethnic minorities are permitted to give birth two or three times in their lifetime. But there are close to a dozen exceptions, including if a baby has disabilities or if the mother and father are both single children. Communist cadres and government officials can be fired for procreational transgressions because they are supposed to set an example. By contrast, Tibetans have the fewest restrictions.

Money is another key factor. The rich in Shanghai and Beijing can easily afford the penalties for a second or third child. The poor in Gansu and Yunnan, by contrast are at risk of having their meagre property confiscated if they fail to remain within birthing quotas.

For family planners like Liu, these injustices and disturbances are seen not as failures, but as aberrations that call for policy tweaks. Countless adjustments over the past 30 years have created a mind-bogglingly complex system that touches on everything from contraception and sterilisation to pensions and tax incentives. In Henan alone, Liu says the family planning policy employs 17,000 administrators and 22,000 nursing and technical staff. In addition, support organisations claim a combined membership of 9,600,000 volunteers, who engage in work as diverse as spreading propaganda to monitoring menstruation cycles- something that is still common in villages though rare in cities.

The state has gone to remarkable lengths to try to fill the gaps left by the missing children. Rule-abiding parents can get a monthly stipend, extra pension benefits when they are older, preferential hospital treatment, first choice for government jobs, extra land allowances and, in some case, free homes and a tonne of free water a month. Their children are even given bonus points in middle school entrance exams.

The system is incredibly expensive. The provincial government sets aside 40 yuan per person for the policy, which adds up to 4bn yuan (£400m) or about four percent of its budget, but this is just a small fraction of the total amount paid by central and village authorities.

Enforcement requires a huge and powerful bureaucracy. "Henan has much to teach the world in family planning, but it is a hard lesson to learn. Officials from Africa and India come to study what we are doing in China, but I'm not sure that they can apply it the same way," said Liu. "That's because they don't have a Communist party so it is difficult for them to take such strong steps."

In theory, the only penalties are hefty fines - in Henan's case, three times the annual net income of the couple who have violated the rules. But the system still relies on a high degree of intrusiveness and communal pressure to achieve targets.

Others argue that the impact of family planning is overblown and simply accelerated what would have happened anyway as a result of improvements in infant mortality, greater participation by women in the workforce and greater availability of contraception.

As China becomes richer and better educated, women in rich cities like Shanghai and Beijing are opting for few children just like their counterparts in wealthy nations. And with the nation's population is forecast to peak around 2030 many say the family planning policy had outlived its usefulness.

"Everybody agrees change is necessary. But the debate is about how to start and when", said Zheng Zhenzhen, a population specialist at the Chinese Academy of Social Science.

"We debate the relationship between the size of the population and resource consumption. But it is not a fixed formula. It depends on how you utilise your resource. We waste and pollute. I think those problems – behaviour – are more important than the size of the population."

In Henan, however, the message that you can consume more if you breed less appears to be more persuasive than threats and penalties.

At the Hui hospital, the new father Li Yongli says he would rather have a first car than a second child. The shift towards fewer legs and more wheels in his family is part of a carefully worked out plan. The final goal is to ensure a better life and education for his son, who was of course, born exactly to schedule.

"It's all part of the program," said the beaming father.

• Additional reporting by Cecily Huang