China Economy

China wants couples to have more kids. Chinese people are less enthusiastic.

Key Points
  • China's announcement Monday that couples can have three children generated a buzz of online discussion on why it isn't practical to have children, let alone three.
  • High education costs and insufficient support for maternity leave and retirement have contributed to a growing reluctance to have children.
  • Changes such as improving access to childcare "are much more important than simply removing the numerical limit on the number of kids you can have," said Rory Green, senior China economist at TS Lombard.
China's shopping malls increasingly feature activity centers similar to this one in Beijing, where kids make cakes on Children's Day on June 1, 2020.
Zhao Jun | China News Service | Getty Images

BEIJING — For many Chinese people, government restrictions have long ceased to be their main reason for not having more children.

That poses a greater challenge for Chinese authorities when trying to limit the negative effects on the economy from a decades-old policy restricting households to one child.

The central government announced Monday that each couple could now have three children, generating a buzz of online discussion — primarily on why it isn't practical to have children, let alone three, in modern China.

More than 30,000 respondents to a simple online poll from state news agency Xinhua overwhelmingly said they weren't considering having more children as a result of the new policy. The poll was soon deleted.

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High education costs and insufficient support for maternity leave and retirement have contributed to a growing reluctance to have children. Loosening the restrictions to two children per couple in the last few years has done little to stall a drop in births, and keep a population of 1.4 billion people from aging rapidly.

The new policy is "completely inadequate to reverse the demographic decline," Rory Green, senior China economist at TS Lombard, said Tuesday on CNBC's "Street Signs Asia." He said structural changes, such as improving access to childcare, "are much more important than simply removing the numerical limit on the number of kids you can have."

"One of the jokes online, after this (new policy) came out, was, 'Why would I want to have another kid when I have to look after four elderly parents, already two kids and potentially nine grandchildren afterwards," he said.

Marriage registrations drop

On Weibo, China's version of Twitter, the top four trending hashtags as of Tuesday morning were about the new three-child policy. Each hashtag had a few hundred million views.

One popular post under the hashtag "What changes the three-child policy will bring" discussed how it would likely become harder for women to pursue a professional career.

"If you aren't married, HR will worry whether you will need to take marriage leave," the Chinese-language post said, according to a CNBC translation. "If you are married without children, HR will worry whether you will need to take maternity leave."

"If you are married with one child, HR will worry whether you will have a second child," the post added. "If you are married with two children, HR will worry whether you will have a third child. If you are married with three children, HR will worry whether you can still manage work with three children."

Another major concern for Chinese couples is whether they can afford a house in a good school district, extracurricular courses and the many other costs needed to raise a child who they believe can then successfully get a good job in a highly competitive environment.

The frenetic rat race within what are often elite, narrow social groups in China has gained so much attention recently it has popularized its own term — "nei juan" — which The New Yorker magazine translated last month as "involution."

Even before considering the question of children, fewer people are forming families. Marriage registrations in mainland China fell 12% last year, marking a seventh year of decline, according to data from Wind Information.

Too little, too late?

Beijing is trying to address some of the social factors that are keeping births low. In addition to allowing each couple to have three children, Chinese authorities emphasized at a meeting Monday the need to reduce the education costs, improve maternity leave and increase support for retirees.

Many of these demographic problems are the same faced by countries such as Japan, where more than 28% of the population is aged 65 or older and growth has stagnated.

The primary economic consequence from an aging population is a lack of productivity.

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In China's case, the country is much poorer than Japan so its productivity growth has more room to rise, preventing the economy from falling into Japan's situation in the near future, Shaun Roache, S&P Global Ratings' Asia-Pacific chief economist, said Tuesday on CNBC's "Squawk Box Asia."

But he noted that China is aging more rapidly than Japan and western Europe, creating a problem that needs to be addressed quickly.

"If people feel the whole of society is aging very, very quickly, they worry about who is going to be paying their pension. They save much more and consume less," Roache said. "You get an unbalanced economy that creates problems in the property market, that leaves the economy too reliant on exports."