China Three Child Policy Too Little Too Late

China has announced that it will allow couples to have up to three children after the 2020 census data showed a steep decline in birth rates.

Above is a chart (from the UN Family Planning Administration) of how many have three or more children in other countries. China has fallen into the low fertility country level. Like Japan or Spain, China might have 10-16% of women willing to have a third child. If China had started this policy back when they had medium-fertility a third child policy might have had 30-40% of women willing to have a third child.

Very low fertility does not reflect very low family size preferences. Women across Europe and other highly developed regions persistently express a strong preference for having two children; the mean ideal and intended family size stays at or above two children per woman. Countries with very low fertility often display a wide gap between fertility aspirations at younger ages and achieved fertility later in life, signaling that many women, men and couples face obstacles in realizing their fertility plans.

Under the new dual-earner model, rigid and demanding labor market, characterized by long working hours and limited work flexibility, negatively affects parenthood decisions. This is especially the case in East Asian countries and territories (Japan, Republic of Korea, Hong Kong SAR, and Taiwan Province of China), where long work hours, particularly among men, clash with extensive responsibilities mothers shoulder in relation to their children’s education and upbringing.

China’s birthrate is now less than half of the level from 1978-1900.

China’s policymakers are still unwilling to lift the birth policies entirely. They do not want too many rural children.

“If we free up policy, people in the countryside could be more willing to give birth than those in the cities, and there could be other problems,” a policy insider had earlier told Reuters, noting that it could lead to poverty and employment pressures among rural families.

The South China Morning Post reports that the three child policy is too little too late.

China needs to have a crash program to make childcare facilities, provide free childcare support and subsidize all aspects of birthing and raising children.

Some have said that Poland’s expanded child allowance program was a failure but a life studies analysis indicates that Poland got a 10% increase in fertility rate as a result of the program.

US child tax credits provide a present value benefit of $7000-17000 per child depending upon income level. There were proposals to increase the present value of the US child tax credits to $25000-30000 per child.

Taiwan and China are two separate countries. However, I will talk about the demographics of Taiwan as well. Taiwan is more economically developed than China on a per capita basis. Taiwan is view into a population that was unified about 70 years ago but Taiwan did not have the one child policy.

China should have completely flipped to pro-child policies over ten years ago. Taiwan had similar demographics to China. In 1951, the average Taiwanese woman would have seven children. In 2010, the fertility rate was 0.89. The population is expected to start shrinking in the next 15 years. Equally worrying is its rapid aging. About 14% of citizens are over 65. Within two decades, that will double. On current trends, it will become the oldest country in the world.

In his 2011 New Year’s Day Address, then-President Ma Ying-jeou declared the 0.89 TFR to be a national crisis. From 2011-2012, the Taiwan government introduced subsidies for childcare. The childcare subsidies were insufficient and better quality care was needed. Mothers gained the right to return to work after up to three years off.

Taipei, which has the lowest birthrate, went furthest. There are free tests to identify fertility problems; parental advisers; a “baby bonus” of 20,000 Taiwanese dollars (£430); and a childcare allowance for under-fives worth up to 150,000 dollars a child. To encourage marriage, the city organizes matchmaking day trips for singles and free courses on handling relationships. It even subsidizes companies to lay on dating activities for employees.

In 2019, the Taiwan fertility poliy includes a cash bonus for the new baby, a maternity leave pension, childcare allowance, daycare subsidy, and privately managed public infant care centers. Total policy expenditure is estimated to cost around 7.2 billion NT dollars per year (approximately GBP 177 million). Most of the expenditure comes from the Ministry of Labor as maternity leave for parents.

Another important policy is the one-time maternity bonus. This was first implemented in Jinmen in 1997, an offshore island from China’s Fujian province, because of the extra revenue generated from the famous Jinmen sorghum liquor. Some local governments adopted this maternity bonus measure over the next two decades, and local governments have their own policy measure according to local demographic structures and financial conditions. For example, Hsinchu City launched the maternity bonus policy in 1999 and the bonus increases by parity: it is NTD 15,000 (GBP 370) for the first-born child, NTD 20,000 (GBP 490) for the second-born child, and NTD 25,000 (GBP 610) for the third child and subsequent children.

Local governments also provide an allowance for children aged up to 5 in a bid to boost birth rates. Generally, parents can receive a monthly payment of NTD 2–3,000 (GBP 50–75) for each child aged 4 and under, and some more resourceful local governments provide an additional amount for the third child. Daycare costs place a huge burden on parents in Taiwan. More than 90% of infant daycare centers are privately owned, and charge around NTD 15–20,000 (GBP 370–490) depending on the locality, roughly 65% to 87% of the minimum monthly salary (NTD 23,100 (GBP 570) as in 2019). As the small amount of subsidy provided by local governments is not enough to support daycare costs, the measure of increasing public daycare facilities to meet the demand had become the top priority for some local governments.

SOURCES- UNFPA, BBC, SCMP, Taiwan Government
Written By Brian Wang,