To all intents and purposes, Li Xue does not exist. True, she is standing in her parents' one-room home in Beijing, in a SpongeBob SquarePants T-shirt and cropped trousers. But with no ID card or household registration, there is no official acknowledgment of her life apart from a hospital form recording her birth and the fine hanging over her family.

"I have never been to school. I can't buy a train ticket. I can't even buy certain cold medicines, which require an identity card. I don't have medical insurance. It's impossible to get a job," said Li, who recently turned 20.

Her parents' refusal to pay for breaching China's strict birth control rules has left their second child without documentation and therefore without access to basic services and opportunities. The one-child policy, which actually allows a third of couples to have another baby, was supposed to be a transitional measure, but more than 30 years later it endures, despite warnings of its punitive effects on China's development and families like Li's.

Repeated attempts to overturn the policy have led to marginal changes. Fresh speculation last week, suggesting a uniform two-child rule might be adopted from 2015, ended in a less dramatic announcement: authorities were considering allowing couples a second birth if one parent was an only child.

"This issue has been discussed for more than 20 years," said Li Jianxin, a population professor at Peking University. "Many good opportunities have already been missed. The policy should have been adjusted a long time ago."

Instead, it has been enforced at huge human cost – forced late-term abortions, a worsening gender gap, increased trauma and economic stress for parents who lose their only child, and punitive fines for families such as Li's.

Forced abortions and sterilisations are illegal, and much less common than they were. But Sharon Hom, the executive director of Human Rights in China, said they are encouraged by family planning targets and perpetuated by the lack of effective checks against local abuses.

Many people buy themselves out of trouble. One family paid a record 1.3m yuan (£136,000) fine last year. Others make hefty "donations" to obtain school places for undocumented children.

Hom said disadvantaged individuals tend to be targeted, while celebrities and wealthy families "can either afford to pay the heavy fines and/or use their government connections for immunity", exacerbating resentments.

Li's parents Li Hongyu and Bai Xuling should have been allowed a second child, because both are disabled. But Bai fell pregnant unexpectedly and officials imposed a 5,000-yuan fine for their failure to get advance approval. The couple earned only 140 yuan a month. Then Bai's state-run employer fired her for breaching the rules. They have spent years pleading with officials and trying to overturn the fine through the courts for a reconsideration. The Guardian was unable to reach Beijing family planning authorities for comment despite repeated attempts.

They insist they should not have to pay and that no one has told them how much it would cost to gain a hukou (household registration) for Li now

Fines are cumulative, said Hom, and because they are heavy to begin with many families are either unable to pay or go into debt to do so. Li's parents now live on less than 2,000 yuan a month, for themselves and their daughter.

Many suspect the fines – known as social compensation fees in recognition of the extra cost to society – give officials a strong incentive to resist reforms. Family planning also employs huge numbers of officials, and authorities fear a slew of births if the rules are eased.

Officials say the birth controls have been vital to China's development and reduced the strain on the environment, preventing 400 million extra births in a country which, even so, has a population of more than 1.3 billion.

But critics say the birth rate had fallen steeply before the "one child" rule was introduced. Even those who agree it was necessary say it is no longer needed.

China's population is expected to peak in about 10 years at 1.45 billion; the working age population shrank last year. Officially the fertility rate stands at 1.7 births per couple, below the 2.1 required to maintain a stable population – and other estimates put it closer to 1.5.

Yuan Xin, of Nankai University's Institute of Population and Development Research, said the policy had contributed to China's economic growth, but created unexpected problems because the population shift happened too fast. It took Britain and France 75 years to move from six to two-child families, he said. In China, it happened in 20 years.

The country is now ageing at a staggering rate, with a shrinking workforce supporting a rocketing number of dependants. Some fear significant changes will come too late."All this time has been wasted on debates … I just think we should take action as soon as possible," said Gu Baochang of Renmin University, a former government adviser and leading advocate of reform, who says local authorities should be freed to set their own policies.

Pilot schemes suggest that relaxing controls will not lead to a major increase in births. Fertility rates are low across east Asia; Taiwan's is far below China's. And many urban couples now say having more than one child is simply too expensive.

Li sees no point in contemplating such abstract considerations: "I never think about marriage and children," she said.

"If I don't have a household registration, how can I get married, and how can I give my child a registration?"

Additional research by Cecily Huang

It's complicated: get-out clauses for the one-child policy

Because family planning regulations are set by provincial and municipal authorities, even experts struggle to keep track of the complicated rules.

Broadly speaking, rural families whose first child is a girl and ethnic minorities have a right to a second child. Families with a disabled child or couples who are both only children are also entitled to another birth, in recognition of the expectation that children will one day support their elders economically. Divorcees with a child are allowed another if their new spouse does not have one.

Some areas allow particular ethnic minorities to have more than two children; others allow fishermen to have a second child under certain conditions, because their work can be difficult and dangerous. Because women traditionally marry into their husbands' families, couples are also allowed to have two children if the woman has no siblings and her husband agrees to help look after her parents.

But there are often conditions, for example requiring couples to wait several years before having a second child. Some places impose additional restrictions. This week, the Beijing News detailed some of the complications: in Beijing, rules state that rural families with a daughter can only have a second child if they farm, have lived in a mountainous area for a long time and face "practical difficulties". Meanwhile, in Ningxia, miners are allowed to apply for a second child even if their first is a boy, as long as they have been working underground for more than five years and will continue doing so.

The strictness of enforcement varies dramatically, although families expecting lax supervision can sometimes face sudden crackdowns. One Tibetan woman with more than a dozen siblings, all born since the introduction of family planning restrictions, told the Guardian that her parents had never been fined.

• This article was amended on 21 August 2012. The paragraph saying that forced abortions and sterilisations are "much less common than they were" was changed to make clear that this statement was not an opinion expressed by Sharon Hom.