15 September 2019
Many young couples in China, especially in the big cities, simply can't afford to have a second child. Photo: Xinhua
Many young couples in China, especially in the big cities, simply can't afford to have a second child. Photo: Xinhua

Policy easing fails to bring a baby boom

It is no secret that China’s labor force, the flesh and bones of the ‘world’s factory’, has begun to shrink at an alarming pace.

Data from the National Bureau of Statistics show that people aged between 15 and 59 dropped for the first time in number in 2012. As the figure fell by 3.45 million, it dragged down the group’s share in the entire population by 0.6 percentage point to 69.2 percent. Last year, the group had 2.4 million fewer people than the year before, reinforcing the belief that China is ageing quicker than any time before.

Naturally, higher wages and losing the manufacturing edge to cheaper countries in the region are two imminent consequences.

Beijing’s answer to the looming problem is a de facto birth control policy U-turn to scrap the notoriously repressive one-child policy. With a nod from top leaders, the National Health and Family Planning Commission (NHFPC) has begun implementing this year a “dandu” policy that allow couples to give birth to a second child as long as either parent is an only child.

The one-child policy has brought China’s once runaway population growth to almost a standstill; according to official data, around 400 million fewer people were born in the country due to the four decades of the rigid implementation of the policy.

Thus, a policy change now was expected to unleash the “pent-up” desire to give birth to more babies, helping quench, among things, the thirst for more workers and paving the way for a consumption boom. Makers of powdered formula, baby care products and even property developers were among those expected to benefit from the baby boom.

But alas, the dandu policy has obviously failed to strike a chord among young couples. NHFPC admitted that merely 271,600 couples have applied to have a second child as of May. That figure is just too insignificant as compared to the total number of couples of childbearing age in the country.

The Chinese Academy of Social Sciences once estimated that with the dandu policy an additional annual population increment of at least 1 million can be guaranteed, but one NHFPC official admitted recently that there won’t be a baby boom any time soon as no more than 300,000 dandu babies could be born this year, the Hong Kong Economic Journal reports.

One good example is Zhejiang province. Provincial officials there believed that an average of 100,000 dandu babies could be born per year during 2015-2020. However, only 47,300 applications have been received so far by the provincial family planning department, meaning 20,000 babies at most could be born with the policy loosening this year, local media reports.

Now it’s safe to say that the baby boom may turn out to be a false one and those expecting to reap extra rewards will be disappointed.

The lukewarm reaction can be a mystery to observers given the long-standing belief of the Chinese that more children mean more support for the parents when they turn old.

One possible explanation for the tepid response is that many young couples, especially those living in major cities and coastal areas, have to devote more time to studies and for career advancement, and they can’t spare the time to bring up children.

Low fertility rate is now a common phenomenon in many cities. Another major factor is that many couples have become overstretched with housing mortgages and can’t afford to have more offspring.

The dandu policy doesn’t apply to couples who are not the only child of their respective families. Analysts say even if Beijing allows these couples to have a second child, there won’t be any significant changes as many still lack the incentive.

Top policymakers will have to come up with more incentives to encourage parenthood as a vital means to address the problem of a shrinking labor force. As for investors, don’t get carried away by hopes for a quick business bonanza for baby-related firms.

– Contact the writer at [email protected]


EJ Insight writer