Childcare costs fix key to population recovery

China is one of the world's most expensive places to raise a child, relative to its GDP per capita, a prominent Chinese think tank said yesterday detailing the time and opportunity costs for women who opt to have children.

The cost of raising children until they are 18 relative to per capita GDP is 6.3 times in China versus 2.08 times in Australia, 2.24 times in France, 4.11 times in the US and 4.26 times in Japan, said Beijing-based YuWa Population Research Institute.

It also leads to a reduction in women's paid work hours and wage rates, while men's livelihoods remain largely unchanged.

"Because the current social environment in China is not friendly to women's fertility, the time and opportunity cost for women to have children is too high," said the report, coauthored by Liang Jianzhang, founder of online traveling site Ctrip and also a founder of the YuWa institute.

"Due to the high cost of childbearing and the difficulty for women to balance family and work, the Chinese people's average fertility willingness is almost the lowest in the world."

The report comes after China's population fell for a second consecutive year in 2023 with the number of births dropping to half of that in 2016 while Hong Kong saw its population edge up to 7.5 million and births hit 33,200 last year.

An increasing number of women are opting not to have children due high child-care costs, and an unwillingness to marry or put careers on hold, while gender discrimination remains rife.

Women generally see a reduction of 2,106 working hours up to when children are four years old and face wage losses of 63,000 yuan based on an hourly wage gauge of 30 yuan per hour.

Having a child will also lead to a 12 to 17 percent drop in women's wages. Leisure time will be reduced by 12.6 hours for mothers with one child up to when they are six and 14 hours for two children.

There is an "urgent need" at the national level to introduce policies to reduce the cost of childbearing as soon as possible, YuWa said, such as cash and tax subsidies, improved child-care services, equal maternity and paternity leave, access to foreign nannies, allowing flexible working and giving single women the same reproductive rights as married women.

The measures together could increase new births to around three million, it said.

In 2023, China's total fertility rate will only be about 1.0, one of the lowest in the world.

"If the current ultra-low fertility rate cannot be improved, China's population will rapidly decline and age, which will have a serious negative impact on innovation and overall national strength," it said.

REUTERS