Let's hope child subsidy will help increase fertility rate
The National Health Commission recently announced that starting Sept 8, families can apply for the nationwide childcare subsidy, either online via Alipay, WeChat or local government service platforms, or in person at township offices where their child is registered.
In my community square, two seemingly distant issues have dominated recent conversations: the Russia-Ukraine conflict and the government's new childcare subsidy program. Under the shade of trees, elderly men argue whether US President Donald Trump's proposed ceasefire mediation will succeed, while women, taking a break from their daily routine, discuss what the new subsidy means for their family.
The subsidy program, aimed at encouraging childbirth, grants families 3,600 yuan ($503) a year for each child below three, benefiting more than 28 million households nationwide.
Ten years ago, China eased its strict family planning policy by allowing all couples to have two children. Many expected the decision would lead to a baby boom. However, that was not to be.
Then, in 2021, the government announced that all couples could have three children. The next year, in 2022, China recorded its first negative population growth. What further complicates the matter on the demographic front is the fast-rising aging population of China. This fact has prompted not only the central government but also provincial governments to take a series of measures to encourage childbirth.
Although some of the provincial and local policies appear more encouraging, the first nationwide program to encourage childbirth will go down in history as a watershed moment.
On the community square, I recently heard some elderly women complaining that the amount of child subsidy is insignificant. Some of them said the 300-yuan-a-month subsidy is hardly enough to pay for a tin of imported infant formula for their grandchildren. According to some comments on social media platforms, the monthly subsidy on average covers about 10 percent of the expenditure on a child in urban areas.
In rural areas, where imported infant formula and disposable diapers are not yet musts and where living costs are relatively low, the subsidy can be a bigger help to couples. But whether the subsidy program will lead to a baby boom in rural areas remains to be seen.
Compared with many other countries where childcare subsidies can be as high as 2,000 yuan a month, the subsidy offered by the central government may appear small. Yet it's a good start. And hopefully, it will be eventually raised to a level that would encourage childbearing-age couples to have two or three children.
Still, the 300 yuan a month subsidy will cost the central treasury more than 100 billion yuan a year. In fact, the total spending may double if we add the subsidies already provided by provincial and local governments.
The experience of other countries and regions show that favorable government policies alone can't help much when it comes to increasing the total fertility rate of a country. At most, the policy can help slow down the pace of decline in the birth rate.
Apart from the cash subsidies, many other supportive measures are on the anvil. However, more needs to be done at different levels to increase the total fertility rate.
A part of the new policies to encourage childbirth is a government document, issued in August, which requires public kindergartens to exempt the tuition fees of kids aged 5 or 6 from this education semester. This shows that step by step, pre-school tuition for kids could become free. If kids can be admitted to kindergartens, including "good kindergartens" without their parents having to pay tuition, it may prompt couples to seriously consider having more than one child.
Other policies for increasing childbirth include providing longer parental leave, improving childcare services and offering favorable housing policies for families with two-to-three children.
The new subsidy policies are a call to childbearing age couples to help boost the demographic dividend by having two or three children, and offset the impact of the rapidly increasing aging population on China's economy and society.
Kang Bing
The author is former deputy editor-in-chief of China Daily.
