China Urged to Pay for Kids to Defuse Demographic Time Bomb
(Bloomberg) -- China hasn’t even abandoned its decades-old birth-control policies and some executives and academics are already calling for new programs to encourage bigger families.
“Only by fully removing birth limits and encouraging births will it be possible for China to reverse its population decline,” Liang Jianzhang, chairman of the travel site Ctrip.com, and Huang Wenzheng, a researcher with the Center for China and Globalization in Beijing, wrote in an op-ed Tuesday on the 163.com news portal. “Raising children in China, in addition to the high cost, also faces serious nursing difficulties because China has a shortage of day-care centers.”
Liang and Huang were responding to a Bloomberg News report Monday that China was considering scrapping the last remnants of its population control policy, after decades of human rights abuses and widening demographic imbalances. The ruling Communist Party could implement the change as soon as this year, as concern grows about the country’s shrinking workforce, Bloomberg said, citing people familiar with the matter.
While many on China’s vast social media platforms cheered the possible change, others worried it wouldn’t be enough to avoid falling into the same stagnation trap of other aging societies like Japan.
“The cry for a total abolition of birth restrictions has been there for years, but resistance is strong,” economist Ma Guangyuan wrote to his 2.6 million Weibo followers in a post that was later deleted. “In fact, even now, lifting the birth limits is too late.”
Calls for replacing birth restrictions with incentives have endured despite the country’s tight internet censorship regime. Even deputies attending annual meetings of the country’s rubber-stamp National People’s Congress in March could be found calling for the change.
“China should remove birth limits as soon as possible,” said Huang Xihua, a lawmaker from the southern province of Guangdong, proposed at the time, according to the Southern Metropolis Daily. “To share families’ burden of raising children, China should also provide free public kindergarten education and deduct individual taxes for multi-child families.”
“Baby bonuses” and other efforts to encourage having children in places such as Germany, Italy, Japan, Singapore and South Korea have been popular, but failed to reverse broader demographic trends. Changing habits may be particularly hard in China, where generations of parents have grown accustomed to concentrating their resources on a single child.
Some, such as Bloomberg Chief Asia Economist Tom Orlik in Beijing, even argue that more births could exacerbate the labor problem by taking more parents out of the workforce.
While more births would help add workers, they’ll actually exacerbate demographic challenges in the first 15 to 20 years by increasing the dependency ratio, according to Trey McArver, co-founder of Beijing-based research firm Trivium China.
China’s dependency ratio, the number of people outside working-age years to those in, will more than double to 76.5 per 100 in 2055 from 37.7 in 2015, the United Nations projects.
“Boosting birth rates is an incredibly difficult task to achieve through policy,” McArver wrote in a note Tuesday. “Many other countries have tried and failed.”
Still, He Yafu, an independent demographer based in Guangdong, said more dramatic action was needed to prevent the country’s population decline. “Only lifting birth restrictions without implementing incentive policies won’t help much with all the looming challenges,” He told Bloomberg on Monday.
©2018 Bloomberg L.P.