China encourages 3rd child, telling party comrades to set example
Regional governments that cannot give cash incentives offer longer parental leave.
With married couples now permitted a third child in China, the government is pressuring Communist Party members to lead by example, even though many complain that they cannot afford to have more children without cash assistance.
In a December editorial, the party-affiliated China Reports Network said Communist Party members have an obligation to marry and have children to contribute to population growth.
There is no excuse for them to have "only one or two children," the piece also said. Posts on online discussion boards urge party members to walk the walk as well.
Still, the push has met lukewarm response among rank-and-file members. "They can try to force us all they want, but there's nothing we can do without better financial assistance," said a father of one in his mid-30s.
Regional governments are also rolling out programs to help child-rearing families. But with strained finances, most of the country has given up on cash incentives, and instead focused on extending parental leave, a gesture largely dismissed by the public as unhelpful.
China has struggled with declining births after years of limiting couples to one, then two, children. About 12 million babies were born in the country in 2020, down 18% from the year before. The figure continued to fall in 2021, with many estimates placing the annual tally below the record low of 11.97 million from 1961.
China's economic development is a top priority for Chinese President Xi Jinping and a rapidly aging society would hinder that.
The national government formally amended a law in April to allow couples a third child, while regional governments have rolled out new programs to help child-rearing families.
At the end of October, Shaanxi Province announced plans to offer an additional six months of maternity leave to women having a third child. The proposal would more than double its current cap of 168 days to about 350.
The city of Beijing is also looking to extend maternity leave, as well as Jiangsu, Hubei and Jiangxi provinces. Those places are looking at about a monthlong extension to the current four to five months.
But some question this focus on maternity leave. "I'd have a hard time returning to work if I were away for so long," said a mother of two in Beijing.
Hunan Province decided not to extend maternity leave, citing the potential effect on women's employment.
The employment rate for women with one child is 6.6 points lower than women with none, according to a study by the Huazhong University of Science and Technology. The rate falls by another 9.3 points among women with two children.
Both parents typically work in China, meaning household incomes suffer significantly when mothers struggle to find a job after a new baby. The Huazhong University study found that families with more children tend to have lower earned incomes.
Rather than extending parental leave, many have advocated for direct cash payments to parents.
"In order to lift birth numbers, it's important to provide cash incentives for a third child," Peking University professor Liu Qiao said in a December speech.
Ren Zeping, chief economist at Soochow Securities, agreed. "The People's Bank of China should print money for a new fund designed to encourage new births," he said.
Ren Zeping, chief economist at Soochow Securities, agreed. "The People's Bank of China should print money for a new fund designed to encourage new births," he said.
But few municipalities have unveiled specific plans for such handouts. The city of Panzhihua, for example, will give out 500 yuan ($78.60) per month for a couple's second and third children until they turn three.
Most others are reluctant to directly distribute cash because of a lack of resources. Tax cuts designed to lift the Chinese economy have squeezed revenues for many regional governments. A cooling housing market has only added to the woes.
Over the years, China's regional governments have grown increasingly dependent on the
for state-owned plots to developers. These sales accounted for 43% of the roughly 19 trillion yuan in independent income logged by regional governments in 2020.
But the Communist Party leadership has recently been cracking down on financing to the real estate sector to discourage speculation. With struggling companies no longer eligible to purchase new rights, total income from selling them grew just 3.8% on the year in January-November -- a marked slowdown from the double digit growth until 2020. The figure fell on the year for 26 of China's 31 provincial-level governments, according to investment bank China International Capital.
Last month, Central Economic Work Conference, which laid out China's economic policies for 2022, warned of tough times ahead for the Communist Party and government agencies. It is unclear how much capacity regional governments have for cash incentives moving forward.
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