Wanted: a baby boom

Government reveals more details on its new Three-Child Policy


Beijing wants a lot more of these

Is China really dropping all restrictions on family size? That seems to be the case, according to a new document from the State Council.

Published on July 20, the document contains a raft of measures to encourage couples to have more babies. It followed a major policy shift since May 31 when the first announcement of the ‘Three-Child Policy’ was made (see WiC543).

Most importantly, the Chinese cabinet said it will abolish a 40 year-old practice of imposing hefty fines for families breaching the allowed birth limit, and promises that any child, regardless of how many siblings they have, will get access to a household registration permit (or hukou) and most social services like education. This decision “completely disconnects household entry, school enrolment, employment from fertility status,” an official explainer states.

China scrapped its two-child cap in May as census results confirmed the lowest level of population growth since the early 1960s (when there was a national famine). But millions of people of child-rearing age have scoffed at the idea of having a third child because of the expense.

Beijing is now trying to make it easier to have larger families by mandating fuller healthcare provision for women and children, assigning more legal protection to women that want to take maternity leave, creating tax breaks for bigger families and promising easier access to education and nursery care. Last week’s State Council document also calls for assisted fertility services (such as IVF) to be made more widely available.

“These supporting measures will help release the potential for reproduction, slow down the process of population aging, promote intergenerational harmony, and enhance the overall vitality of society,” its authors hope.

The announcement triggered surges in shares for companies in the pregnancy and baby-rearing business. The Shenzhen-listed milk supplier Xinjiang Western Animal Husbandry saw its stock rise by its daily limit of 10%, for example.

Panzhihua in Sichuan province last week became the first Chinese city to give out cash incentives for families that have more than one child. A subsidy of Rmb500 ($77) per baby per month will be received until the child is three.

At the moment the new measures are little more than guidance – they will need to be turned into concrete legislation and detailed policies, at which point younger families may take more interest in whether they address their concerns about having more children.

In all likelihood couples will still be slow to respond, if they choose to react at all (many have opted to stick with one child even when it became possible to have two). The deputy minister of the National Health Commission is also warning that the national birth rate will fall again this year and that the population will “continue to age”.

The question for many is why the government has clung on to a formal birth control policy. Some say scrapping it entirely would be an admission that past population controls were a mistake; others venture the possibility that the government still wants the ‘right type’ of people – i.e. the educated – to have the additional children, rather than other parts of the population.

Officially, birth control is a policy that’s written into the Chinese constitution and the central government continues to insist that the country, with the sheer size of its population and uneven development across different regions, still needs some form of centralised family planning.

Meanwhile, the Chinese cabinet said people who have been fined for having a third child before May 31 this year would not have their money refunded. But they won’t need to pay the fines either, if they have not already done so.

© ChinTell Ltd. All rights reserved.

Sponsored by HSBC.

The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.