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| China offers $31,000 loan to young couples to boost birth rate |
China, who once compiled the
one child policy in 1980 to control its population, has recently
announced to give a special loan called 'Baby Loan' of 31 thousand dollars (23
lakh rupees) encouraging couples to marry and have babies, as the rapidly-aging
country trying to reverse a slump in births.
Now, whole China is facing the
problem of a falling birth rate. The current population of China is also aging
rapidly. China's three northeastern provinces - Jilin, Liaoning and
Heilongjiang - are facing the fastest-shrinking-population issues. In such a
situation, China has taken this step to overcome the situation.
The population of the region
decreased by 10.3% in 2020 compared to 2010. During this period, the biggest
fall in the population of Jilin has been recorded at 12.7%. For which once
again in August 2021, the policy of three children has been brought to increase
the declining population.
The 'Baby Loan' which is also
being considered as 'marriage and birth consumer loan' will also be
reduce interest rates as per the number of children a couple has. What’s more:
Couples who have two or three children will also get tax discounts if they set
up a business.
The Chinese government believes
that the new policy will come with “supportive measures, which will be
conducive to improving our country’s population structure, fulfilling the
country’s strategy of actively coping with an aging population and maintaining
the advantage, endowment of human resources”, (Source: Xinhua news agency)
Jilin province in northeast
China will support banks to provide up to 200,000 yuan ($31,400) of “marriage
and birth consumer loans” to married couples, according to an official
blueprint on policies to promote population growth. There were no details on
how the government would offer support, but the proposal includes discounted
interest rates for the loans that vary according to the number of children a
couple has.(Source: Bloomberg News)
The One Child Policy was
enforced by China under its former leader Deng Xiaoping, in 1980 to counter the
burgeoning population and expedite economic progress which remained in force
till 2016. According to the data of China's census in 2021, the birth rate here
has registered a decline for the fourth year in a row. In 2020, 12 million
children were born here, which is 18% less than the 14 million children in
2019. It is undoubtedly pointed to the decreasing Total Fertility Rate of
China's declining population.
The number of people above 60
years of age is 18.7 % i.e. 24.4 crores, which is 5.5% as compared to the
previous population, 44% higher. According to the UN report, the population of
China is projected to decline drastically by the year 2030.
By seeing all these issues now
China has formally revised its laws to allow couples to have up to three
children, to boost the birth rate.
How will China's birth rate support its economy?
According to an analysis by Robin Brant for the BBC in May, the demographic change China is experiencing is not unique, but it is a significant issue because it has the biggest population in the world and has an economy that it is trying to make more reliant on domestic consumption.
“China's Communist leaders have already said the retirement age will need to go up to deal with those demands and costs. This could mean more work to come for the country's workers,” Brant noted.
Though a three-child policy has now been announced by the Chinese government, many remain sceptical, wondering how it would be able to address challenges that the 2016 change could not, due to factors such as higher cost of living and long working hours.
Why do young Chinese couples don't Want to have kids?
The reality is that the baby
loan policy brought by China has become a cause of controversy not only at the
global level but also among Chinese couples, due to the huge expenditure on the
birth and upbringing of a child in China. Let's take a look at the reasons-
As per a Reuters
report that cited a 2005
study by a state think-tank, it cost 490,000 Yuan (Rs 57.6 lakh approx.) for an ordinary family to raise
a kid in China. The figure had quadrupled by 2020, when the local media reported that the cost had risen to as
high as 1.99
million Yuan (Rs 2.35
crore approx.) to raise a child in the country.
It starts with astronomically
high prenatal tests and deliveries. While the costs are usually covered by
state insurance in Chinese public hospitals, the resources-strapped public
hospitals cannot cater to all women. The alternative is turning to private
clinics, which charge more than 100,000 Yuan (Rs 11.7 lakh approx.), as per reports.
This is only the beginning.
The cost of hiring an in-house nursemaid (known as yuesao in China) is about 15,000 Yuan
(Rs 1.7 lakh) a month. If you're
looking for professional postpartum care centers, which incidentally are
preferred by new mothers who are working women, the costs range from 150,000 to 350,000 Yuan
(Rs 17 lakh to Rs 41 lakh) per month.
And all this is just till the
birth of the child. The real expenses begin only after that. The private
schools charge up to 250,000 Yuan (Rs 29.5 lakh) as fees per year and the parents have no
option but to cough up because public schools are only for kids who have hukou.
Let’s not even get into the costs of private tutoring and extra-curricular activities
such as piano, tennis or chess classes, which are a social norm.
It is therefore not
unsurprising that young couples choose to not have kids. Caught between home
loans, mortgage and car loans, the 'birth loans' are not easing the situation,
but only making the Chinese people work to pay their bank dues
That's why young couples here
choose not to have children. Caught between home loans, mortgages and car
loans, 'birth loans' are not easing the situation, but instead forcing Chinese
people to pay their bank dues.
Conclusion
China’s latest census confirmed long-standing demographic imbalances that could pose major threats to the sustainability of the country’s economy, prompting Party leaders to take action.
According to the census, there were 12 million
newborns in 2020, which was the lowest number of births since a famine in the
1960s. The fertility rate was 1.3 children per woman in 2020, which is far
below the replacement level of 2.1. It is similar to the fertility rates in
Japan and Italy, which are home to some of the world’s oldest populations.
In contrast to developed countries with low
fertility rates, however, China is still a developing middle-income economy
with a limited social security net. Further, China does not take in significant
amounts of immigrants, which puts further importance on domestic fertility to
maintain the size of its workforce. By 2050, demographers project that the over
60 years of age population could make up one-third of the country’s total. Now
China is dreaming of restoring the declining birth rate through this plan.
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