Raising Children in China is Much More Expensive than in the US, Japan

The cost of raising children in China is nearly seven times the Gross Domestic Product (GDP) per capita, far more than in the United States and Japan.

This research highlights the challenges facing Chinese policymakers as the government seeks to tackle the rapid decline in the birth rate.

Experts warn China’s aging population will put enormous pressure on its health and social security system, while a dwindling workforce could also severely limit growth in the world’s second-largest economy in the coming decades.

Despite the new policy allowing families to have three children, China’s birth rate fell to 7.52 births per 1,000 people by 2021, the lowest since the National Bureau of Statistics began recording the data in 1949.

The exorbitant costs of raising children have prompted a crackdown from Beijing on the private tutoring industry, while some regions have been giving couples cash to have a second or third child.

The Beijing-based YuWa Population Research Institute in a report published Tuesday (22/2) said the average cost of raising a child to the age of 18 in China in 2019 was $76,629 for a first child, 6.9 times China’s GDP per capita, in that year.

China ranks second highest among the 13 countries covered in the study, behind only South Korea, which has the lowest birth rate in the world. The US figure based on 2015 data reached 4.11 times GDP per capita while the Japanese figure based on 2010 data was 4.26.

The cost of raising children is even higher in China’s major cities, reaching over 1 million yuan in Shanghai and 969,000 yuan in Beijing. The birth rates in both cities are even lower than the national average.

One mother, who gave her name as “Maning” on China’s Twitter-like microblogging site Weibo, said she believed the costs of raising a child in Beijing may even be higher than stated in the report.

“With that calculation, I can hardly imagine having a second child and a family wanting to have a third child is incredible,” he said.

YuWa warned the fall in the birth rate would “severely affect” China’s economic growth potential, its ability to innovate and its welfare burden.

The YuWa report added that China needs to budget at least 5% of its annual GDP to create incentives for couples to have more children, including education subsidies, special housing loans, tax breaks, equal maternity and maternity leave, and building more child care centres. [my/jm]