China Can’t Solve Birth Dearth by Throwing Money at Problem

Governments can be dominated by inertia, self-serving statements, and bureaucratic politics — dictatorships more so than democracies, as democracies at least have corrective mechanisms. At times, it seems that what matters most is not solving problems but appearing to solve problems. Take a look at China’s latest moves to deal with its population decline.

To encourage childbirth, the Chinese government announced on July 28 a bonus of 3,600 renminbi (about $500) for each child under three. Over three years, this subsidy tallies to $1,500, a sum unlikely to materially change China’s looming demographic collapse. Even with the relatively low cost of living enjoyed by many Chinese, $500 would allow a family to purchase perhaps 50 pizzas — one a week.

FL

About the Author

Frank Lavin

Frank Lavin is a fellow at the Dornsife Center at the University of Southern California. He worked on China policy in the U.S. Department of Commerce and worked in banking and business in China. His latest book is Inside the Reagan White House.

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Governments can be dominated by inertia, self-serving statements, and bureaucratic politics — dictatorships more so than democracies, as democracies at least have corrective mechanisms. At times, it seems that what matters most is not solving problems but appearing to solve problems. Take a look at China’s latest moves to deal with its population decline.

To encourage childbirth, the Chinese government announced on July 28 a bonus of 3,600 renminbi (about $500) for each child under three. Over three years, this subsidy tallies to $1,500, a sum unlikely to materially change China’s looming demographic collapse. Even with the relatively low cost of living enjoyed by many Chinese, $500 would allow a family to purchase perhaps 50 pizzas — one a week.

FL

About the Author

Frank Lavin

Frank Lavin is a fellow at the Dornsife Center at the University of Southern California. He worked on China policy in the U.S. Department of Commerce and worked in banking and business in China. His latest book is Inside the Reagan White House.