Controversial proposal of childbirth fund draws criticism

The proposal of setting up a childbirth fund to cover expenses of families having second child has drawn a wave of criticism.

An article published Tuesday on Xinhua Daily, a Party-run newspaper of Jiangsu province, suggested establishing a childbirth fund which collects a portion of salary from employees under the age of 40 to cover costs incurred during breaks of female workers on maternal leave.

The article was written jointly by Liu Zhibiao and Zhang Ye from the Yangtze Institute of Industrial Economy of the Nanjing University.

The article said families having a second baby are allowed to draw money from the fund as subsidy for their child rearing. If a family does not have a second child, it can withdraw the money deposited in the fund upon retirement.

The article said as the number of Chinese women of child-bearing age is expected to drop dramatically in the next decade, and the positive effect of loosening family-planning policy to wane, China faces a grim prospect of low birth rate and declining working population.

The proposal has drawn a wave of criticism from internet users and scholars.

"Do you know how much pressure we working people between the ages 25 to 30 suffer? We pay thousands of yuan each month on housing mortgage and car mortgage and social security premiums. We have to empty out our pockets to make the ends meet. Now you reach your hands into our pocket for childbirth fund?" commented an internet user on wallstreetcn.com.

He Yafu, a demographer, told Caixin.com that Chinese employees already pay a relatively high level of social insurance premiums - around 39 percent of the total income. Paying for the proposed childbirth fund will push up the cost of employers, which goes against the guideline of the central government to ease burden on enterprises and let employees have more cash in hand.

He said to encourage more people to have child, the country should implement more measures to ease financial burdens on families, such as tax break and subsidy for families with new child.

According to statistics of National Bureau of Statistics, the total birth rate of China was 1.7 in 2016, below the level needed for population replacement, which is 2.1 by recognized international standard.

To reverse the trend of low fertility rate, China loosened its decades-long family-planning policy in 2016, allowing couples to have a second child, and extended maternity leave to parents with new babies.

However, the number of newborns in 2017 has dropped by 630,000 from the previous year, which indicates that the "two children policy" has not increased the birth rates.

To raise the birth rate, local governments have rolled out preferential policies for families with new child.

Xianning city in Hubei province announced policies this month to give subsidies of up to 30,000 yuan to families with difficulties in having baby and exempt a portion of fees for their children to attend kindergarten, and grant priority to families with a second child in applying for low-income houses.

In June, Shaanxi province pledged to allow women to give birth to as many children as they want.