Because of the low birth rates, China is threatened with massive economic and social problems. Several measures should remedy the situation. Some of these are controversial.
This analysis lies IPPEN.MEDIA as part of a cooperation with China.Table Professional Briefing before – first published him China.Table on June 8, 2023.
Beijing – China’s head of state Xi Jinping has taken up the cause of the “great rejuvenation of Chinese civilization”. But China’s population is on the opposite path: it’s aging, and rapidly. Last year, the population shrank for the first time in six decades. If it continues to fall at this sharp rate, it will have a massive impact on China’s welfare system and economic power.
Some of the consequences are already being felt, and in fact very concretely so, as the founder of a baby supplies company from Shanghai recently reported in a newspaper interview: Play with the idea of moving from babies to pets in the next three to five years – change clothes.
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Due to numerous challenges, the Chinese hesitate to have children. The fact that Beijing has lifted its one-child policy and now even allows three children per family has not changed this development: Officially, the birth rate in 2020 was 1.3 children per woman.
High education and training costs are causing China’s population to shrink
The costs of bringing up and educating a child up to the age of 18 are relatively higher in China than in Germany or the USA, for example: while in China in 2019 they were 6.9 times the equivalent of around 67,600 euros of the annual GDP per capita, parents in the USA have to spend 5.25 times and in Germany only 3.64 times the annual GDP per capita. Many women also fear that having a child could have a negative impact on their careers.
As recently as March, outraged discussions erupted on China’s social media after a company in Wuhan allegedly fired a young woman because of her pregnancy. The law’s “Special Provisions on the Protection of Female Employees”, which prohibits employers from reducing the wages of female employees or terminating their employment contract if they are pregnant, are rarely legally enforced. There are also numerous loopholes that companies can use to circumvent the regulations. There are many reports circulating in China’s social media about how bonus payments are being cut or how employees are being bullied until they quit of their own accord.
In an op-ed in the state newspaper Economic Daily states that the state must now help China’s young parents “to achieve a moderate level of fertility and to optimize the demographic structure”. For example, China wants to double the number of childcare facilities by 2025, as reported by state broadcaster CCTV. The number of caregivers per 1,000 inhabitants is expected to rise from 2.5 in 2022 to 4.5 in 2025.
China plans stimulus for ‘moderate fertility levels’
At the same time, pilot projects have been launched in more than 20 cities to “create a new era of marriage and childbirth culture” like the state one GlobalTimes reported. Provision is made for tax incentives, housing subsidies and free or subsidized education for a third child. “Outdated customs” such as dowries and bride prices should also be fought.
Individual local governments are already trying to outdo each other with their advances: the province of Guangdong, for example, is planning to create jobs for mothers with small children under the age of twelve. The northeast Chinese city of Shenyang offers families with a third child a monthly subsidy of the equivalent of 65 euros until the child is three years old. The city of Hangzhou, east China’s Zhejiang Province, wants to give a one-time subsidy equivalent to US$2,600 to couples having a third child, and US$650 to couples with two children.
Some policy advisors are even proposing to allow unmarried women to have egg freezing and in vitro treatments – so far, such procedures are only granted to married women who can demonstrate fertility problems. Noted economist Ren Zeping even suggested that China’s central bank print two trillion yuan ($314 billion) to support the birth of 50 million babies over the next decade. After a lively debate, Ren’s official channels on online platforms Weibo and WeChat were frozen. His ideas are impractical and he lacks “common sense,” Ren’s critics said.
“One-Child Policy Has Changed Chinese Attitudes to Having Children”
Demographics expert Yi Fuxian considers the government measures approved so far to be a drop in the ocean. “Not only does the government not have enough resources to increase the birth rate, but young people have to pay high taxes to do so, which further limits their ability to raise children,” explains the senior demographer in obstetrics and gynecology of the University of Wisconsin-Madison in an interview with Table.Media.
In the absence of better ideas, China is now trying the Japanese model, which, however, has already proven to be “expensive and inefficient” years ago, explains Yi. There, the birth rate leveled off at 1.34 births per woman after a short increase, despite the reduction in training costs, the provision of better childcare facilities, and childbirth and housing allowances. And China, “which grows old before it gets rich,” does not even have the financial means to “fully follow Japan’s path.”
“The Chinese government is too keen on quick success,” Yi believes. In his opinion, the real problem lies deeper and is psychological in nature. “The one-child policy has changed Chinese attitudes towards having children and distorted moral values about life and family. Having only one child or no children at all has become the social norm in China.”
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