China wants more children. But its people cannot afford them

Indian Express

8 hours ago

China's economy is facing multiple challenges today, and population decline is one of them. President Xi Jinping seems to be struggling to find a solution that mitigates this before it is irreversible. As per the January 2025 figures, China's population continued to decline for the third consecutive year and its total population declined by 1.39 million. This is accompanied by reducing marriage numbers and an advancing retirement age. Is China going to get older before it gets richer?
The one-child policy was introduced by Deng Xiaoping in 1979 who argued that a developing China required population control till it was in a position to improve living standards. The draconian policy was implemented with great rigour. At the same time, the role of Chinese labour in helping China present itself as the 'world's factory' and the centre of global supply chains can't be overlooked. The consistently declining population will adversely impact this pool of labour.
Under its most recent effort to improve the birth rate, the Chinese government has announced that it will provide RMB 3,600 (about $500) until the age of three. The policy states, 'A unified national system will be established to manage the childrearing subsidy programme. The payments will be exempt from personal income tax and will not be counted as household or individual income when calculating eligibility for social assistance programmes such as the minimum living allowance'.
In 2016, Xi Jinping abolished the one-child policy which was replaced by a two-child policy, hoping to see a change in population statistics. This was later changed to a three-child policy in 2021. However, the rising cost of childcare and education is proving to be a tough hurdle. As per a study by the China-based YuWa Population Research Institute, 'Raising a child to the age of 17 in China costs an average of $75,700'. The Chinese government has been keen to extend support by providing daycare as well as other benefits (like tax benefits) but it is still failing to address the original question: Why are Chinese couples having fewer children?
Cost is definitely a challenge but there is more to it. The one-child policy has resulted in a lop-sided demography. China, being a patriarchal society, has always had a male child preference. The sex-ratio, therefore, is heavily skewed towards males, which has, in turn, led to a situation where more and more Chinese men are unable to find a spouse. In addition, the country's economic growth has added a large number of women to the workforce, who are financially independent and not keen to sacrifice their careers.
Xi's call to Chinese women to have more children has had no major response. In 2023, he had asserted that women should 'actively cultivate a new culture of marriage and childbearing and strengthen guidance on young people's view on marriage, childbirth and family'. But after Covid, the cost of healthcare has been rising and is pushing people to save more. The heavily ageing population is also putting a burden on the younger workforce. In the last few years, the number of old age homes in China has been rising while kindergartens have been shutting down (by more than 5 per cent in 2023).
By now, every experiment seems to be too little too late. The issue that Xi and the Communist Party need to acknowledge is that Chinese society has effectively changed, not least due to the one-child policy. Economic reforms have helped women gain financial independence and move out of the traditional roles. Today, Xi hopes that in the name of the rejuvenation of the Chinese nation, he can demand that women give up their hard-fought independence, limited as it may still be. Only time will tell whether the government's efforts will succeed or if a different strategy will be needed.
The writer is Associate Professor, OP Jindal Global University