The government is taking steps to encourage more couples to have a second child by lowering the cost of raising children.
“We will raise the personal income tax threshold and introduce expense deductions for items such as children’s education and treatment for serious illnesses, relieving the burden when necessary,” said Premier Li Keqiang on March 5, when he presented the Government Work Report at the opening session of the National People’s Congress.
Last year, 17.23 million children were born in China, roughly 630,000 fewer than in 2016, according to the National Bureau of Statistics.
Many experts had predicted that there would be a baby boom between 2016 and this year following the implementation of the amended family planning policy.
However, the NBS data shows that has not materialized, and the reality is that relaxing the family planning policy will not result in a rising birthrate.
Wang Pei’an, vice-minister at the National Health and Family Planning Commission, said 90 million people are eligible to have a second child, but only 28 percent of them can do so, given factors such as age, health, financial status and disposition.
“The policy is not the obstacle preventing families from having a second child,” he said. “The problem is that people are reluctant because of the high cost of raising a child, a limited amount of energy to care for very young children and the negative impact on women’s careers.”
The favorable tax policies — discussed for the first time in five years during the work report on March 5 — are aimed at creating a “parent-friendly environment” by cutting the cost of raising children.
Ding Lei, founder and CEO of NetEase, a gaming portal, said tax collection should vary depending on whether a family has one or two children, while Dong Mingzhu, president of Gree Electric Appliances Inc, said the personal income tax threshold should be raised to 10,000 yuan ($1,580).
“The majority of today’s taxpayers are the generation born in the 1980s, and they are facing difficulties such as high education fees and expensive mortgages,” she said.