Is money the only factor dissuading Chinese from having a second child?

By Grace Shao

BEIJING–China’s new two-child policy took effect late last year and is well on its way to quickening the nation’s demographic pulse.

Chinese analysts expect a higher birth rate to peak in 2017 with some scholars estimating that the new policy will lead to a population increase of up to 8 million annually in the near term.  This stems from an Oct. 30 decision by the Communist Party of China to finally declare an end to the one-child policy era in order to address the problems of an aging workforce and gender imbalance. If all goes well, officials reckon that 30 million workers could be added to China’s economy by 2015.

chibab2But while most hail the new policy as the right move, some experts say the high cost of rearing a second child in China will slow the success of the two-child policy.

“China’s two-child policy is a step forward, a great progress for China when we start to think about the birth-rate policy from the perspective of human rights. It guarantees the rights for citizens to have, and legally recognize and register a new-born second child (unlike before),” said Professor Yilong Yan, a professor at the School of Public Management of Tsinghua University.

Official statistics say the current ratio of working-age population (people aged between 20 to 59) to the retirement age population (60 and above) is 5:1, the country is becoming more and more stressed about the diminishing labor force. It is estimated that by 2050, the ratio will decrease to 1:4, which means that the country is about to witness an increase in demand for old-care, healthcare and related goods and services. The country needs more workers, but not every young family wants more children.

Professor Zhou Shaojie, an associate professor at the Public Policy School at Tsinghua University voices some concerns. He believes the reluctance of some young adults to have more children means that the overall Chinese population will not be affected dramatically.

“For most urban families, the main concern of having a second child for young couples is the high cost. It’s really just economical.”

Other concerns could slow the two-child trend, including the issue of employees requesting another maternity leave and the overall female career development.

The trend toward smaller families dates back a half century, China’s fertility rate has been declining since the early 1960s, long before the one-child policy was introduced. By 2013, China’s average birthrate was at 1.55 per family, similar to developed countries such as Germany, Japan and the average of the European Union.

This is mainly due to the country’s urbanization. With the high living cost in cities like Beijing, Shanghai, Guangzhou, couples are choosing to only have one child or some even none.

Said Professor Zhou Shaojie: “Yes, Chinese families used to be big, but there is no difference between having a boy or girl in cities. Cultural norms can change over time…though in rural areas, families still prefer boys over girls, because they need the physical labor help, and it is those families bringing up the average fertility rate.”

Again, attention is brought back to the economic burden a second a child will bring to these families. Professor Zhao Yaohui from Peking University believes that for young couples living in urban areas of China, the need for financial stability and economic reassurance will be the main factor contributing to the decision of whether to have a second child.

Regardless of such academic analysis, the question of having a second child is a deeply personal and individual choice for Chinese citizens.

Qiu Zhiyong a History major Ph.D. candidate at Tsinghua University is from a small town in Jiang Xi province. He completed his undergraduate and master degree in history at Yunan University, but his first choice initially was to study economics at Southwestern University of Finance and Economics.

Qiu coyly admits that “maybe it was due to traditional values in my small town that as a boy, I received more attention than many girls. My family and teachers always paid a lot of attention to my education and therefore I always tried hard … Now, my main focus for my child and maybe future children will be on their education as well.”

That cost is daunting. An estimated cost of an undergraduate degree including tuition and cost of living in China is about 138,000 yuan for four years, a master degree is expected to run 126,000 yuan for three years. Meanwhile, a Ph.D. degree is usually subsidized, so assuming a cost of living of 3000 yuan per month ($500), a Ph.D. degree is going to cost about 144,000 yuan. These conservative estimates total 408,000 yuan for 11 years of post-secondary education.

According to Sohu.com, 10.7% of the Chinese population is classified as middle-class, according to the International Monetary Fund’s PPP standard, which means accumulated wealth of $28,000 to $280,000 (168,000 to 1.68 million yuan). Though 100 million people may seem a considerable number, and the cost of education may be much lower than developed nations in the West. Still, the cost of higher education is still a hefty liability for the vast majority in China.

So for Qiu, whose income is much higher than the national household average income, of 53,118 yuan, a second child is still an economic burden.

Despite this, Qiu even expresses optimism about the new two-child policy: “It’s just a matter of time. China will allow people to have however many kids you want sooner or later. Once the economy hits some sort of a balance, it will all be better …”

A conservative estimate conducted by Sina.com of the average cost of raising a child in China shows that the cost of raising a child is alarmingly high. On average, the cost of raising a child from birth to high school graduation in China is approximately 247,400 yuan.

In 2014, Credit Suisse Group AG conducted research estimating the cost of raising a child (in an urban city) from birth through to 18 years of age to be 23,000 yuan ($3,745) a year, at 414,000 yuan. That is equivalent to 43% of the average household income in China.

Even more astonishingly, for cities like Beijing, Shanghai, and Shenzhen the cost of raising a child from birth to university graduation is estimated to be 2.77 million yuan, 2.47 million yuan, and 2.16 million yuan respectively. As these three cities are among the top ten most expensive cities to live in Asia, the cost of having another child can be mind boggling.

Qiu acknowledges the existence of the economic burden, but for him, the hardest thing about raising children right now is the fact that he and his wife are not living in the same city due to the demands placed on him by his studies. And the child-care burden is put on his parents, which is common among Chinese. “It is also hard to live with the parents and not have any arguments over how the child/children should be raised,” Qiu said.

Qiu thinks while the traditional values of China are “boys are better than girls,” with the growing Western influence (especially among the higher educated), either a boy or a girl would receive the same level of attention and education. Qiu believes the old-fashioned values still run deep in rural areas. He and his wife both hope to have a second child because they wish their boy can have a sibling to play with and lean on when they grow older. The gender of the baby will not make a difference.

Xiaowei Chang, a worker in the admissions office at the Beijing Institute of Technology, argues that two children are not an economic burden:

“I was able to have two children because both my husband and I are the only child in our families. I didn’t worry too much about the economic burden but I know I am lucky, and most families will have to face this difficulty. Since I work at the university, both my children are guaranteed a spot at the affiliated primary school and high school. Most of the expenditure will go towards their education outside of the classroom, such as English tutoring and Mathematical Olympiad classes. I think it’ll be 80% of all the money spent on them … food, shelter and leisure can be adjusted accordingly to income per household. If you’re richer you may buy brand-name clothing, and go on extravagant trips but in every parent will spend the most on the children’s education.”

Not everyone is concerned about the money when it comes to having a second child. Gong Yi Chong is a now stay-at-home full-time mom. Born in 1992, she only grew up with “one-child” classmates is determined to have a second child.

She said: “For me, money was never a concern. It isn’t that expensive to give birth at a public hospital, but I went to a private one, which came down to more than 50,000 yuan. I know some of my friends do worry about the economic burden. For example, one of my good friends, she has already decided to not have another child only in her early twenties because she and her husband cannot afford it.”

As for herself Gong says: “I would like to work eventually, but after college, I had my first child, and I am devoted to raising him right now … I think I prefer to wait for another two or three years for my second child, but I just want to go with the flow … I prefer to breastfeed, so I think I will open up a boutique coffee shop after they are old enough to be cutoff.”

“Ultimately, what my husband and I value the most is the education my children will receive, I am already planning on enrolling my kid into preschool in two years (at age 3). And I know that is where most of the expenditure will go to,” Gong said.

There is widespread support for the two-child policy in Beijing. A survey of 438 respondents conducted by masters degree students at Tsinghua showed the policy seems to be widely accepted by the population. The basic sentiment is that people can afford to have another child in cities such as Beijing, Shanghai, and Hong Kong, which ranked seventh, eighth and ninth as the most expensive cities in Asia by ECA International.

The new two-child policy will not only change the average household’s expenditures. It will also have a dramatic impact on Chinese society. It will ease problems such as the aging population and the gender birthrate inequality, and it will solve problems such as the “only-child emperor syndrome” and satisfy many parents who are eager to have a companion for their current child.

In China, where education ranks above all else, families will spend as much as 80% of its budget on education. Though the cost of higher education is low vs. most Western nations (especially the US), most middle-class families in China feel the economic weight of education costs.

“The two-child policy will have a different affect on people from different income levels. My main concern is the quality of education for my children,” Qiu said. “My income will directly affect my children’s education quality to some extent. But personally I think that every family has their own way of raising children no matter rich or poor. So it is not necessary to blindly put all the money into education.

But for Qiu “What really matters is the relationship we build with our children. Teaching them how to interact with people and setting a good example for them is more important than any school. So in that sense, income level is only one of the factors that can affect the quality of education. Some children in rich families are often spoiled and become the little emperors. It is not good for their future development.”

Simone Martin, Amy Zhong and Laura Zhang contributed to this article.

Grace Shao is a Beijing-based freelance journalist. She has written for CCTV America and other publications. She is completing a Bilingual Masters degree at Tsinghua University in financial journalism.



Categories: Asia Times News & Features, China

Tags: , ,