[Correspondent Diary] Is China Pouring 1800 Trillion Won into the 'Three-Child' Policy?

Achieving a Total Fertility Rate of 2.1 Requires 10% of GDP... The Three-Child Policy Should Have Been Implemented 5 Years Ago
Aging Is a Bigger Issue Than Birth Rates in China... 400 Million People Aged 65 and Over by 2050

[Asia Economy Beijing=Special Correspondent Jo Young-shin] On the 20th, the Standing Committee of the National People's Congress (NPC) of China passed an amendment to the "Population and Family Planning Law." The law explicitly states that "one couple can have three children." The Political Bureau of the Communist Party of China finalized the amendment to the Population and Family Planning Law in May, as the population cliff became a reality due to declining birth rates.

China has maintained a "one-child" policy since implementing the reform and opening-up policy in 1979. This is similar to South Korea's "have one child and raise well" policy. Concerned about population decline, China introduced a "two-child" policy in 2016. However, the two-child policy did not produce significant effects. Since 2022, China's population has begun to decline, and it is predicted that by 2050, 170 million people will disappear.

Photo by Global Times capture

The Chinese state-run Global Times published an article titled "Raising China's birth rate requires 10% of GDP." Considering that China's GDP last year was 101.5985 trillion yuan, this means that 10 trillion yuan (approximately 1800 trillion Korean won) is needed.

Liang Jianzhang, a professor in the Department of Economics at Peking University, argued, "To reach a total fertility rate of 2.1, which is necessary for stable population maintenance, 10% of GDP is required." Last year, China's total fertility rate was 1.3. Professor Liang emphasized, "So far, China has spent enormous amounts of money on building roads, railways, and factories, but going forward, money should be used to reduce the burden of child-rearing."

Lu Zhihua, a professor in the Department of Sociology at Peking University, said, "China's birth rate is extremely low," and added, "Considering the bleak situation, policies and support measures need to accelerate."

Xinhua News Agency reported that comprehensive measures will be taken to promote the long-term balanced development of the population, and various support measures in finance, taxation, insurance, education, housing, employment, and healthcare will be promoted to establish an inclusive childcare service system.

Cities that provide subsidies to encourage childbirth have also appeared. Panzhihua City in Sichuan Province, with a population of 1.23 million, announced last month that it will pay 500 yuan (about 90,000 Korean won) per month for the second and third child. Panzhihua City is the first in China to provide subsidies for childbirth.

Ren Zeping, director of the Evergrande Research Institute, argued, "First-tier cities (large cities) should pay 3,000 to 5,000 yuan per month for the third child." He added, "China should have established childbirth encouragement policies five years ago. We cannot wait any longer."

The amendment to China's Population and Family Planning Law means that China will inevitably focus on stable growth rather than high growth for the time being. The enormous funds previously invested in development are expected to be used to address social issues such as childbirth and aging for the time being. On the other hand, there is also an evaluation that a new market related to childbirth, such as newborns, may open. The Global Times reported that as the three-child policy becomes visible, childcare and childbirth-related companies are gaining attention.

However, it is uncertain whether the childbirth and aging issues will achieve the intended results according to the Chinese government's plans. It is unclear whether the birth rate of Chinese people who have experienced Xiaokang (小康), meaning "a moderately prosperous society where all people enjoy a comfortable and affluent life," will rise again.

Some argue that the aging problem is a bigger issue than the birth rate problem. If the current trend continues, it is widely predicted that by 2050, the number of elderly people aged 65 and over in China will exceed 400 million. The population, which is the core and driving force of China's economic growth, is likely to no longer exert that power.

This content was produced with the assistance of AI translation services.