Explained: Why a Chinese Province Offers “Baby Loans” to Couples

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Northeast China’s Jilin Province to Donate loans to married couples up to $ 31,000 in order to encourage them to have children. The province’s move comes as China contemplates a drop in the birth rate. Earlier this year, China’s census data showed that its population growth had reached its slowest rate since the 1950s.

In August, China relaxed its previous two-child standard and approved a three-child policy mentioned by the ruling Communist Party. The resolution was adopted with several others at a meeting of the National People’s Congress (NPC).

China’s demographic problems are particularly acute in the three northeastern provinces of Jilin, Liaoning and Heilongjiang, Reuters said, with residents venturing to other provinces to work as couples postpone marriage or consider to start a family.

The region’s population fell 10.3% in 2020 compared to 2010. Jilin fell 12.7%, Reuters reported.

How important is the birth rate to an economy like China?

According to an analysis by Robin Brant for the BBC in May, the demographic change China is experiencing is not unique, but it is a significant problem because it has the largest population in the world and has an economy that it is trying to overcome. make it more dependent. on domestic consumption.

“The Chinese Communist leaders have already declared that the retirement age will have to increase to meet these demands and these costs. It could mean more work ahead for workers across the country, ”Brant noted.

How well has China’s one-child policy worked?

China’s one-child policy, which was enforced by former leader Deng Xiaoping in 1980, remained in place until 2016, when fears of rapidly aging populations undermining economic growth forced the Communist Party in power to allow two children per married couple.

While the easing resulted in some improvement in the proportion of young people in the country, the policy change was deemed insufficient to avert a looming demographic crisis.

Even though a three-child policy has now been announced, many remain skeptical, wondering how it could meet challenges that the 2016 change was unable to address, due to factors such as the higher cost of living and long working hours.

China launched its one-child policy in 1980 when the Communist Party feared that the country’s growing population, which at the time was approaching one billion, could hinder economic progress.

The policy, which has been implemented more effectively in urban areas, has been enforced in a number of ways, including providing financial incentives for families to have children, making contraceptives widely available, and imposing sanctions against those who violate the law. Politics.

Chinese officials have long hailed the policy as a success, saying it helped the country avoid severe food and water shortages by preventing the birth of 40 million people.

However, the limit of one child was also a source of discontent as the state used brutal tactics such as forced abortions and sterilizations.

It was also criticized and remained controversial for violating human rights and for being unfair to poorer Chinese because the richer could afford to pay economic sanctions if they violated policy.

Why do many remain skeptical of the three-child policy?

Experts say relaxing the limits on reproductive rights alone cannot prevent unwanted demographic change.

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According to them, the main factors behind the decrease in the number of children are the increase in the cost of living, education and support for aging parents. The problem is compounded by the country’s pervasive culture of long working hours. There has also been a cultural shift in the decades that the one-child policy has remained in place, with many couples believing that one child is enough, and some expressing no interest in having children.

The Chinese government, however, said that the new policy will be accompanied by “supporting measures, which will be conducive to improving the population structure of our country, to achieving the country’s strategy of actively dealing with the aging population and maintain the advantage, human resource endowment, ”according to the Xinhua news agency.

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