China’s falling birth rate has had many policymakers worried for some time, but a recent report reveals the rising monetary cost of raising a family. In April 2021, China formally ended the two-child limit to spur population growth and tackle the declining fertility rate with a three-child policy.
China recorded a population growth of 0.34 per cent per one thousand in 2021, a decrease of 1.11 per cent, which is the country’s lowest ever recorded population growth. In 2021, only 10.62 million babies were born in China, an 11.5 per cent drop from 12 million babies in 2020.
But another population-related figure that has people in China worried is the skyrocketing cost of raising a family, which is now higher than the average cost in the US, France, Germany, and Japan.
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Raising a child in China
A report published by Beijing-based YuWa Population Research Institute says, on average, it costs $76,760 to raise a child in China, including everything from pregnancy-related costs to tuition fees. The study said the cost in cities could be more than double at 630,000 yuan ($99,666) than in rural areas at 300,000 yuan ($47,460). Raising a child in Beijing or Shanghai can cost a family as much as one million yuan ($158,413).
The report has generated extensive discussion about the shape of China’s demography. The hashtag “China Fertility Cost Report 2022 Edition” was viewed 58.61 million times on Weibo, the Chinese equivalent of Twitter. The hashtag: “It takes 627,000 to raise a child until graduation from college” began trending after the report was published, and was viewed 1.8 million times.
The Chinese government is concerned because it affects the long-term demographic distribution of China’s workforce and could impact economic productivity.
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Major reforms needed
The YuWa Institute’s report has suggested addressing the declining fertility rate through particular policy actions. The measures include cash and tax subsidies, housing subsidies, building childcare centres, providing equal parental leave for men and women, promoting flexible working models, allowing assisted reproductive technology and education reform.
One of the silver linings of China’s worrying demographic trend is the improving productivity rights, especially for single women. The report has also suggested allowing foreign nannies into the mainland, which would reduce the average cost of raising a child. “If three million foreign nannies are hired in the mainland, these families could save a total of more than 200 billion yuan each year,” said the report.
Unlike other developed countries, China has never openly welcomed foreign workers. Therefore, hiring foreign nannies will require both policy and cultural adjustments.
The report has made recommendations about relaxing rules for children born out of wedlock or abandoned by their parents after birth. The hukou system is seen as a major impediment because parents may try to improve their children’s future. The hukou system controls the access to public services and education tied to the child’s parents.
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‘Myths’ about population crisis
Liang Jianzhang, the co-founder and chairman of CITIC Group, wrote an op-ed dispelling ten myths about the population crisis that prevails in China.
He wrote that ageing and low birth rate aren’t a phenomenon only of developed countries. “China’s current fertility rate is far lower than the average level of developed countries, and its future ageing rate is also higher than that of almost all developed countries, while China’s current efforts to encourage fertility are far less than developed countries. To alleviate the problem of low birth rate and ageing population in the future, it is necessary to encourage fertility vigorously,” Liang wrote.
The other myth he talked about is the alleged positive impact of a decline in population size on job opportunities: “…If the population of the country begins to decrease significantly, most small and medium-sized cities will decline rapidly, infrastructure will stop updating or even be abandoned due to insufficient demand and financial resources, and the population will further accelerate to a few large cities.”
Liang linked the declining fertility rate with China’s long-term national strength. “China is already facing a looming low fertility crisis. The declining birth rate will have a profound impact on China’s economic growth potential, innovation vitality, support burden, people’s happiness index and even national rejuvenation. The sharp shrinking of the population also means the continuous weakening of the scale effect and the decline of the overall national strength,” he wrote.
After years of State-driven one-child policy, the dire impact of the government planning on demographics is now evident. China has an uphill battle to revive its falling fertility rate.
The author is a columnist and a freelance journalist. He was previously a China media journalist at the BBC World Service. He tweets @aadilbrar. Views are personal.
(Edited by Srinjoy Dey)