China considers baby bonus for couples to have second child

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Story highlights

  • China dropped its one-child policy in 2015 after more than four decades
  • Fertility rates dropped dramatically to 1.5 per woman between 1995 and 2014

Hong Kong (CNN)The Chinese government may consider giving families financial incentives to have a second child in a bid to reach higher birth rate targets.

It marks a dramatic turnaround from more than four decades of the country's one-child policy when there were harsh penalties for having more than one, including fines and forced abortions.
Wang Peian, the vice-minister of the National Health and Family Planning Commission (NHFPC), said the commission is considering "birth rewards and subsidies" for second children, the state-owned China Daily reported on Tuesday.
    Wang made the announcement on Saturday during a meeting of the China Social Welfare Academy, a Chinese NGO that works closely with the government. A spokesperson for the organization declined commenting on Wang's speech to CNN.
    The announcement was in part prompted by a survey the NHFPC carried out in 2015, showing that 60% of families polled were reluctant to have a second child because of financial constraints, according to China Daily.

    One-child policy

    China overturned its one-child policy in October 2015, allowing couples across the country to have two children. Birth rates have risen since then, but the government is trying to meet higher birth rate targets as the population ages.
    Lu Jiehua, a sociology professor at Peking University, said that financial incentives for a second child are a "positive signal."
    But how much the government can afford to subsidize -- in a country where the cost of living and education are skyrocketing -- will determine whether the potential bonuses will work, he said.
    "The financial incentives would require more effort from other government agencies to cover the cost of raising a child, which is more important than giving birth," Lu said.

    In search of a baby boom

    China's new two-child policy
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    The one-child policy was introduced in 1979 when the government feared a rapid increase in population size after the baby boom of the 1950s and 1960s.
    The country's fertility rate fell dramatically, from a peak of almost six births per female between 1960 and 1965 to 1.5 per woman between 1995 and 2014.
    The two-child policy officially began in 2016 under a government program to jump start that declining birth rate -- especially because China faces a rapidly aging population and a shortage of working-age residents.
    China is home to 114 million people over 65, and up to 90 million people are expected to retire in the next three decades, leaving the labor force with even fewer people until newborns are old enough to work.
    By 2030, the government has warned China will have the most aged population on Earth, with more than 400 million people over 60.

    Waiting for the newborns

    So far -- when it comes to energizing China's birth rate -- the two-child policy is working, with or without subsidies.
    The number of babies born in 2016 jumped 7.9% from the previous year, according to government figures.
    A total of 17.86 million babies were born in 2016, an increase of 1.31 million over the total in 2015. The new total represents the highest annual number of newborns since 2000, according to government data.
    Challenges still remain when it comes to building up the country's newest workforce.
    Lu said that women in China who are now of child-bearing age were raised under the one-child policy. Having grown up under strict family planning policies, many are inclined not to have children -- let alone second pregnancies.
    "It's hard to change their mindset," Lu said.
    Experts warn the impact of the two-child policy won't be felt until those new babies are old enough to join the workforce.