Childbirth fund proposal makes splash as China encourages citizens to have more children

A baby stretches its hand from under a quilt at a hospital in Jiaxing, Zhejiang province on October 25, 2011. Photo: Reuters

An article in which two scholars proposed to set up a national fertility fund to compulsively collect money from the salaries of Chinese citizens under the age of 40 until they give birth to a second child has triggered a heated debate online, as the Chinese government is mulling more policies aimed at increasing birthrate.

In the article, which was recently published in the Xinhua Daily, a newspaper backed by the Jiangsu Provincial Committee of the Communist Party of China, Liu Zhibiao and Zhang Ye, two scholars from the Yangtze River Industrial Economics Research Institute of Nanjing University, put forward several pieces of advice as possible methods to reverse China's low birthrate brought about by decades of the strict one-child policy, among which one idea about establishing the fertility fund has caused outcry among Internet users.

The two writers called on the government to take out a certain proportion of the annual salaries of citizens, regardless of gender, for the reproduction fund until they give birth to a second child when the deducted money can be withdrawn as compensation for short-term income losses caused by labor shortage, according to the Xinhua Daily article.

The duo further suggested in the article that those who fail to have a second child can only get back the money from the childbirth fund after retirement.

The controversial idea comes as the Chinese government is growing anxious about the aging population and shortage of young workforce, which it considers as the potential factors that will have impact on the future economic growth.

China adopted the one-child policy more than 30 years ago, with the side effects of the policy turning up in the recent years. Although the lifting of the ban in 2016 has met the growing demand of some couples who want to have a second child, the fertility fund proposal has exasperated a large majority of Chinese citizens, who have voiced opposition on the Internet by accusing the "impenetrable" idea for violating human rights.

Those critics defended their right to decide whether they want to have a second child, saying that the public willingness for giving birth cannot be activated by forcibly imposing taxes like the fertility fund but by rolling out more incentive policies including improving the preschool education infrastructure, optimizing the compulsory education system and giving financial subsidies to families with more than two children.

"The proposal of establishing the fertility fund bears a purpose of encouraging childbirth, but it cannot be misused as a coercive measure," said demographer He Yafu.

Imposing fertility fund tax would increase the rate of social insurance expense and push up the labor costs of enterprises, which goes against the spirit of the government's 13th five-year development plan, which vows to reduce the social insurance premium rate, added He.

He also described the idea of establishing the fertility fund as "infeasible", citing a great number of freelancers in China.

Even the China Central Television, the country's largest state broadcaster, responded with a commentary which called the idea of setting up the fertility fund "absurd".

The CCTV commentary said that the idea would undermine the government's efforts to reduce the personal income tax and administrative charges and improve the social security system.

According to a report released by the Shanghai University of Finance and Economics, the ratio of household debt to disposable income in China jumped to 107.2 percent in 2017.

In 2017, there were 17.23 million newborns, down 3.5 percent from a year ago, showed statistics from China's National Bureau of Statistics. The fall in the number of births beat the expectations of the government which scraped the one-child policy in 2016 to encourage childbirth amid worries about the aging society.

In order to follow the national call, many provinces have designed support policies including tax break, delivery subsidies and extended maternity leave.

The Chinese government is also reportedly considering an end to the two-child policy allowing citizens to have a third child or more.

However, China's family planning commission has said that an increasing number of Chinese people would like to delay marriage and pregnancy, a trend many experts said might be caused by a changing attitude toward childbirth and the heighted economic pressure.

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