Liang Jianzhang, Huang Wenzheng: Births for the nation

May 26 , 2020

By Liang Jianzhang, co-founder and chairman of Group and senior vice chair at  the Center for China and Globalization(CCG) and Huang Wenzheng, senior fellow at the Center for China and Globalization(CCG)

Government should introduce policies to encourage couples to have more children

As the demographic trend in China has shown a major fundamental change, some of the local laws and the regulations, which no longer conform to the country’s overarching demographic strategy, should be adjusted in due course.

From a demographic perspective, China’s fertility rate is well below replacement levels, and what is needed now is to raise it through various measures. In 2013, the Chinese government relaxed its more than three-decade-old family-planning policy and issued a two-child policy for couples where either the husband or the wife is from a single-child family. In 2015, the two-child policy was officially generalized to cover all couples.

According to the National Bureau of Statistics, of all the babies born in 2019, 5.93 million are the first-born child of their parents, representing 40.5 percent of the newborns; 8.35 million, or 57 percent, are the second baby in their family; and only 2.5 percent are the third or fourth child.

Another reason why China’s fertility rate has been below the replacement level for 30 years is that as the social welfare system has become more mature and comprehensive, people have discarded the traditional mindset of “raising sons to care for the parents in their old age”. In this context, having more children is altruistic as it means couples having more children provide new blood to the society, support the pension system, and maintain vitality for the nation, without expecting to gain more than others. From this perspective, having more children should be rewarded.

In order to maintain the sustainable development of our population, it is recommended to build a fertility-friendly society so that more couples of child-bearing age can afford to raise more children. For instance, it is suggested that the Ministry of Finance may consider the overall distribution of maternity subsidies. From the birth of a child to the age of six, the state finance can issue a certain amount of child care subsidies every month. The specific amount can refer to the local minimum wage standard.

For a few years, those with two or more children, personal income tax and social security contributions have been waived to some degree. These reductions could be increased.

Besides, considering that the high price of housing is one of the key factors influencing couples’ willingness to have children, governments could introduce targeted preferential policies, especially for those on lower incomes in big cities. For example, exempting land prices could slash the housing prices by half. To make it more feasible, the local governments could directly exempt multi-children families from the land price, or refund them if they have more children after purchasing houses, with a flexible exemption ratio in line with the fertility rate.