China Faces High Childcare Cost as Population Shrinks, Growth Slows

A Chinese think tank finds raising a child cost more than in US, Japan.

By Kitty Wang for RFA Mandarin

China is one of the most expensive countries in the world to raise a child, with almost the lowest average desire by women to give birth due to the high cost entailed and the difficulty to balance family and work responsibilities, a Chinese think-tank has found.

The cost of raising a child until he or she turns 18 is equivalent to 6.3 times China’s GDP per capita, according to the 2024 childbirth cost report by Yuwa Population Research.This contrasts with 4.11 times in the United States, Japan’s 4.26 times, as well as 2.91 times in Sweden.

Such indicators are bad news for the world’s second-largest economy facing a shrinking and aging population. Productivity and economic growth are sputtering as well, as Beijing grapples with overcoming structural problems exacerbated by a crisis in the real estate sector – traditionally a major growth driver – and mounting local government debts.

The Chinese government has since 2021 allowed for three children in a major policy shift that began with replacing its controversial one-child policy in 2016 with a two-child limit. The change failed to lead to a sustained upsurge in births.

The report found that raising children led to a reduction in women’s paid work hours, mainly before the child was four years old, unlike men, for whom fatherhood brings no change to their working lives.

What’s more, women lost a total of 2,106 hours of work caring for children aged 0 to 4 years. Based on an hourly wage of 30 yuan (US$4.17), the reduced income would be about 63,000 yuan.

Having children also means an overall 12-17% drop in women’s wages. A mother with a child under six will see her weekly leisure time cut by 12.6 hours, while one with two children will experience a 14-hour reduction.

“Childbearing cost bears the most impact on a family’s willingness to have a child,” the report stated. At the national level, there is an “urgent need to introduce policies as soon as possible” to reduce the cost of childbearing for families of childbearing age. It recommended nine measures, including cash and tax subsidies, and equal child rearing leave for men and women.

Together, these measures could increase the number of births by about 3 million, the report said.

China recorded a second straight year of population decline in 2023 and the seventh consecutive year in drop of births, with the number of newborns less than half of 2016. During the same period, China’s total fertility rate was only about 1.0, one of the lowest in the world.

The report warns that if the current ultra-low fertility rate is not improved, China’s population will rapidly decline. By 2050, it will reach 1.17 billion, and 479 million in 2100.

Translated by RFA staff. Edited by Taejun Kang and Mike Firn.