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individuals and families have the freedom to have or not have children. however, for a country, if the fertility rate remains below the replacement level and the population shrinks over a long period of time, the consequence will be a decline in national strength and economy, and a lack of successors for the country and nation.

written byhe yafu

according to media reports, a couple in shenzhen recently gave birth to their third child, quadruplets. due to premature birth, the four babies were treated in the neonatal intensive care unit for a month, which is estimated to cost 200,000 yuan.

according to the child's father, mr. chen, he and his wife both work in a company in shenzhen, with a combined monthly income of about 10,000 yuan. the family already had two children, and after the quadruplets were born, his wife had to quit her job in order to take care of the six children.the financial burden of the family fell entirely on mr. chen's shoulders.

mr. chen said that his income is meager and he hopes to get help from caring people in the society.

after being reported by the media, this incident quickly became a hot topic and sparked heated discussions.

i looked at the comments from netizens and found that many of them criticized, ridiculed and mocked the couple. here are some typical comments:

can't afford to raise a child but still want to give birth

i feel bad for the child being born into this kind of family.

adults should be responsible for their own actions.

don’t you know how big your home is before you give birth?

the poorer you are, the more you want to have children. the most pitiful thing is that these children were born in selfish families.

reject those who beg for food online!

how much does a vasectomy cost?

having so many children without money is really a pain for both adults and children

01

why should the state subsidize childbirth?

in a first-tier city like shenzhen, it is indeed difficult for mr. chen and his wife to support a family of eight with their current income. it is understandable that mr. chen hopes to get help from caring people in the society.

many netizens believe that "you should raise your own children yourself"; but i believe that the country should introduce a birth subsidy (or childcare subsidy) policy to share part of the childcare costs.if there were a childcare subsidy policy, with 6 childcare subsidies for 6 children, perhaps mr. chen would not need to seek help from the society.

before the 2020 national "two sessions", national people's congress representative huang xihua plans to submit a "proposal on building a fertility-friendly society" to the "two sessions".

huang xihua asked for my opinion when writing this draft proposal. i put forward several suggestions, including abolishing birth restrictions and introducing childcare subsidy policies.

later, huang xihua adopted my opinion in the proposal submitted to the "two sessions", and proposed: for each child, from birth until the age of 6, the state finances will provide a certain amount of childcare subsidy every month. the specific amount can be referred to the local minimum wage standard.

picture/tuchong creative

why should the state subsidize childbirth?

the reason is that in modern society,with the improvement of social pension security, more and more people no longer rely on "raising children to provide for their old age".

if childbirth is not subsidized, then from the perspective of economic benefits, parents bear the cost of raising children, and when the children grow up and work, they contribute taxes to the country, and the country is the beneficiary.

for most families, having and raising children is a negative benefit from an economic perspective; under normal circumstances, the social wealth created by a person in his or her lifetime is generally greater than the social wealth he or she consumes, which is a positive benefit for the country.

therefore, when a family gives birth to and raises children, they are actually contributing to the country and society at a huge cost.

the taxation system and social pension system in modern society actually means that families with more children subsidize families without children. the lower the fertility rate, the heavier the burden of pension, and the greater the depreciation of pension in the future. it can be said that part of the pension that families without children will receive in the future comes from the taxes paid by families with more children.

therefore, it is fair that under the condition of social pension, the state finances part of the family's child-rearing costs.

some people may question: "the pension i receive after retirement comes from the pension insurance premiums i paid. how can it be called social pension?"

what's wrong with this view?

his mistake was that he did not realize that the products or services purchased with pension funds also needed to be provided by the working population at that time.

assume an extreme situation: all young people in a country stop having children and all young people pay social pension insurance. then, when these young people reach the statutory retirement age, they start to receive pensions. although every retired elderly person can receive a pension, they will find that there are very few commodities in society (because most people have retired and there is almost no working population), and the service industry is also very depressed. in this case, both commodity prices and service prices will be surprisingly high.

so, when you retire and receive a pension, if the number of working people is much smaller than the number of people receiving pensions, the pension will be greatly devalued.

picture/tuchong creative

in china today, there is already socialized elderly care, but generally speaking, there is no socialized child care.the cost of having and raising children is borne primarily by the family, which is one of the main reasons for the continuous decline in fertility rates.

some so-called "austrian" scholars are against childcare subsidies, but they support reducing or exempting personal income tax for families with children. i think that the two approaches of providing childcare subsidies and reducing or exempting personal income tax for families with children are actually not contradictory. in other words, providing childcare subsidies to families with lower incomes and reducing or exempting personal income tax for families with higher incomes.

china's current personal income tax threshold is 5,000 yuan per month (in addition there are several special tax deductions). if only tax cuts are given to families with children without issuing childcare subsidies, then families whose personal income does not reach the personal income tax threshold will not enjoy childcare benefits. only those families with higher personal incomes can enjoy childcare benefits.

it can be seen from this that if we only reduce taxes for families with children without providing childcare subsidies, this policy will only benefit wealthy families but not poor families.

02

maternity subsidy policies at home and abroad

in recent years, many local governments in china have introduced childcare subsidy policies, such as:

in august 2023, hangzhou city introduced a fertility subsidy policy, including two categories: maternity subsidies and childcare subsidies. in terms of maternity subsidies, a one-time subsidy of 2,000 yuan and 5,000 yuan will be given to those who are pregnant (giving birth to) the second and third children respectively; in terms of childcare subsidies, a one-time subsidy of 5,000 yuan and 20,000 yuan will be given to those who give birth to the second and third children respectively.

in may 2024, hefei city introduced a childcare subsidy policy. the subsidy amount for families eligible to give birth to two or three children is: a one-time subsidy of 2,000 yuan for a second child and a one-time subsidy of 5,000 yuan for a third child.

however, compared with the huge cost of raising children, the amount of childcare subsidies issued in the country is generally too small and cannot significantly increase the fertility intention of couples of childbearing age.moreover, the childcare subsidy policies introduced in most places only subsidize the second and third children, not the first or fourth child.

at present, many countries in the world have introduced policies to subsidize childbirth. let’s take a look at the situation of subsidized childbirth in singapore in asia and hungary in europe.

in february 2023, singapore released its 2023 national budget, which emphasized that it will continue to increase subsidies for citizen childbirth.

according to the budget, the subsidy for each first and second child of singaporean citizens will increase from 8,000 singapore dollars (about 41,800 yuan) to 11,000 singapore dollars (about 57,400 yuan). if the third child is born, the subsidy will increase to 13,000 singapore dollars (about 67,800 yuan).

however, singapore’s subsidized fertility policy cannot prevent the downward trend in fertility rate. in 2023, singapore’s fertility rate was only 0.97, ranking second from the bottom among all countries in the world, second only to south korea.

one of the reasons for singapore's low fertility rate is that the cost of living in singapore is extremely high.the global cost of living survey released by the british "economist" think tank in 2023 showed that singapore has topped the list of the world's most expensive cities for the ninth time in the past 11 years, tied with zurich for first place.

picture/tuchong creative

in contrast, hungary's policy of subsidizing fertility has achieved better results. hungary's fertility rate dropped to a historic low of 1.25 in 2011. after a substantial increase in financial subsidies for families with many children in 2019, the fertility rate began to rise again, rising to 1.61 in 2021.

according to hungary's childbearing subsidy policy, women under the age of 40 can apply for an interest-free loan of 10 million forints (about 230,000 yuan) when they first get married. women can suspend loan repayments for three years from the year they give birth to their first child; when they give birth to their second child, they can get a one-third reduction in the loan; when they give birth to their third child, the entire loan is waived; if they give birth to four or more children, they can also be permanently exempted from personal income tax. however, if the couple does not have a child within five years of marriage, they will need to pay the loan interest.

of course, to increase the fertility rate, in addition to providing childcare subsidies, it is also necessary to vigorously develop universal childcare services, guarantee women's equal employment rights, and create a fertility-friendly atmosphere in society.

03

does china need to subsidize childbirth?

how low has china's fertility rate been in recent years?

it can be summarized as follows: vertically, china's fertility rate in 2022 and 2023 is the lowest on record, only half of the replacement level. horizontally, china's fertility rate ranks last among countries with a population of more than 100 million.

given that china has fallen into a low fertility trap, subsidizing fertility becomes particularly urgent.

of course, some people are against childbirth subsidies. they believe that in the future, ai (artificial intelligence) will replace more and more people's jobs. china has too many people, so a population reduction is a good thing. with a smaller population, it will be easier to find a job. this view is actually one-sided. the reason is:

on the one hand, with a larger population, there will be many people competing for one job; but on the other hand, with a larger population, more jobs will be created. big cities have a large population, while small cities have a small population, but the unemployment rate in big cities is not necessarily higher than that in small cities. the yangtze river delta and the pearl river delta are both the most densely populated regions in china, but many people from central and western provinces go to these two places to find jobs.

picture/tuchong creative

generally speaking, unemployment is low during economic booms and high during economic busts.for example, during the great depression of 1929-1933, the u.s. population was only 120 million, but the unemployment rate was as high as 25%. if you think the high unemployment rate is because the population is too large, do you think the u.s. also needed to reduce its population at that time? however, in 2023, the u.s. population has reached 336 million, and the unemployment rate is only 3.63%.

the advancement of technologies such as ai will indeed replace many people’s jobs; however, on the other hand, technological advancement will also create many new jobs. there are many jobs or professions now that did not exist decades ago, such as food delivery boys, couriers, new media operations specialists, and online anchors.

the "china internet audiovisual development research report (2024)" shows that as of december 2023, the total number of short video accounts on the entire network will reach 1.55 billion, and the number of professional anchors will reach 15.08 million.

others believe that population quality is more important than population quantity.i believe that population quality is as important as population quantity, and that a larger population quantity will promote higher population quality.

for example, if other conditions are basically the same, the overall quality of 10,000 outstanding talents selected from a country with a population of 1.4 billion is definitely higher than that of 10,000 outstanding talents selected from a country with a population of 140 million. many executives of high-tech companies in the united states are of indian descent, not because indians have particularly high iqs, but because india has a particularly large population base, so the probability of outstanding talents emerging is greater.

individuals and families have the freedom to have children or not; but for a country, if the fertility rate remains below the replacement level and the population shrinks over a long period of time, the consequence will be a decline in national strength and economy, and a lack of successors for the country and nation.

under the condition of low fertility rate, raising the fertility rate is a measure that benefits both the country and the people, so it is fair and reasonable to include fertility subsidies as an item of fiscal expenditure.