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China Can't Just Throw Money At Its Fertility Crisis

As China grapples with an aging population and falling fertility rate, the government has tried different measures to encourage people to have children. But the suggestion by one of the country's top economists to print money to kickstart a baby boom did not go down well with the Chinese public — raising children isn't just a question of money.

China Can't Just Throw Money At Its Fertility Crisis

There is a consensus that having children should be vigorously encouraged, but how?

Jing Yishan

-Analysis-

BEIJING — Earlier this month, Ren Zeping, a Chinese economist, suggested that the country’s central bank should set up a two trillion yuan ($315 billion) maternity benefit fund so to encourage a baby boom of 50 million extra children within the next 10 years.

Zeping reckons that we should seize this opportunity while the generation of women born between 1975 and 1985 are still fertile, and not put too much hope in the generation born after 1990. This is due to the fact that the older generation still have the idea that happiness is to be found in having more children, whereas those born after 1990 often reject the idea of having more than one child and even reject the idea of marriage.


As the steady decline in fertility and the aging of the population have become more evident in China, there is now a social consensus that having children should be vigorously encouraged. The question is, what should be done concretely to encourage it?

Inflation won't bring baby boom

Zeping’s suggestions come from his research as an economist. However, his idea has been overwhelmingly rejected by the public.

The core of Zeping’s concept is to set up a maternity fund derived from “money printing” at the central bank. Yet, as anyone with basic economic sense can understand, the value of money doesn’t come from that banknote, but the purchasing power the banknote represents. When the central bank prints more money, it means an increase in market currency and naturally a decrease in purchasing power. Concretely speaking, this signifies that the original amount of money that a family owns would then be worth less. That means inflation.

Can direct cash benefits really boost fertility?

Meanwhile, families with more children will benefit from governmental support while the ones who have fewer children or none will have to bear a disadvantage in disguise. In effect, this actually leads to a transfer of social wealth. In other words, taxing families with no children to subsidize the ones with children.

This is why it’s not surprising that Zeping’s suggestion aroused a lot of objections from those who have no children or only one child.

At the International Baby and Children Products Expo in Hong Kong

Dickson Lee/South China Morning Post via ZUMA

Women's age matters

Even if the government goes ahead with Zeping's recommendation, can direct cash benefits really boost fertility? Not necessarily. The calculation is simple — two trillion yuan of support for 50 million children means only 40,000 yuan ($6,320) per child.

In certain underdeveloped areas, this sum might be attractive, but in urban areas, it becomes almost negligible. In addition, from the current online feedback to this suggestion, the public’s response is not at all enthusiastic.

In fact, the reason why young Chinese willingness to have offspring has plummeted is not just a question of money. One of the complaints about Zeping’s idea is his suggestion that encouraging the generation born between 1975 and 1985 would be more useful than the one born after 1990.

But a woman born in 1975 is already 46 years old, meaning that she has passed the optimal age for childbearing.

A long-term birth policy that neglects the youngsters would be short-sighted

Ignoring both the biological age limit and aspirations for quality of life with the aim of increasing the population is virtually the same as regarding this specific group of people as just child-making machines. Such single-track thinking that puts the birth rate above all other considerations is a very distorted perception.

Time has a price 

Even more to the point is that Zeping didn’t try to properly analyze why different age groups have a different mentality about having children.

Though the cost of childbearing makes up a very important part of the reasons that hinder youngsters from becoming parents, the hidden costs involve time, energy and the trade-off of a woman’s career rather than just direct economic expenses. If one really has an insight on willingness in parenthood, these problems ought to be solved rather than just giving up on the younger generation and bribing the older one.

In the European countries where encouraging parenthood has been effective, such as Sweden, the governments usually roll out various kinds of support measures in addition to generous financial benefits.

For instance, providing universal childcare institutions to help dual-earner families save time and energy for raising children; a guarantee of women’s employment rights; equal parental leave for both men and women, etc.

From the experiences of other countries, it’s clear that alleviating women’s worries of the impact on their professional development brought about by having and raising children is critical for raising their interest in child-bearing. The younger generation of women today are on average more educated, so they attach more importance to their careers. Unless their concerns are addressed, encouragement of the birth rate will be just empty talk. And a long-term birth policy that neglects the youngsters who represent the future would be short-sighted.

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