2019 The Economist Intelligence - Unknown

Moving on from one
How can China manage its declining fertility?

A report by The Economist Intelligence Unit
Sponsored by
MOVING ON FROM ONE
HOW CAN CHINA MANAGE ITS DECLINING FERTILITY?
Contents
About this report 2
Executive summary 3
Introduction5
China’s falling fertility rate 7
The policy response 11
How have other regions responded to falling fertility? 16
Evidence of effectiveness for policies from the wider literature 19
Discussion and recommendations 21
References25
Appendix: Methods 30
1 © The Economist Intelligence Unit Limited 2019

MOVING ON FROM ONE
About this report
“Moving on from one: How can China manage its declining fertility?” is an Economist Intelligence
Unit report that examines the main drivers behind the drop in the fertility rate in China. It reviews the
evidence for a range of policy levers that could be used to increase the country’s birth rate back up
to (or near) population replacement level. The report also examines the experiences of three other
case-study countries—Singapore, South Korea and Australia—and the Special Administrative Region of
Hong Kong, in their own endeavours to maintain sustainable fertility rates.
The Economist Intelligence Unit carried out a literature review on fertility rate interventions both in
China and across the globe. Alongside this, interviews were conducted with local experts. The report
looks at family-friendly policies and whether assisted reproduction technologies, such as fertility
medication, in vitro fertilization (IVF) and surrogacy, could play a role in increasing fertility levels. A
more detailed description of our methodology is provided in the appendix. This report is sponsored by
Merck.
We would like to thank the following individuals and organizations for sharing their insight and
experience.
l Wu Fan, Professor, Department of Social Work and Social Policy, Nankai University
lY
ang Dongzi, Professor, Chief of Department of Obstetrics and Gynecology, Assisted Reproductive
Center of Sun Yat-Sen Memorial Hospital, Sun Yat-Sen University
l Paul Siu Fai Yip, Professor and Associate Dean, Faculty of Social Sciences, University of Hong Kong
l Yuan Xin, Professor, Director of Center for Strategic Studies on Ageing, Institute of Population and
Development, School of Economics, Nankai University
lZ
heng Zhenzhen, Professor, Institute of Population and Labor Economics, Chinese Academy of
Social Sciences
The Economist Intelligence Unit bears sole responsibility for the content of this report. The findings
and views expressed in the report do not necessarily reflect the views of the sponsor. The EIU team
involved in this report consisted of Guo Yue, Samuel Choo and Alan Lovell.

MOVING ON FROM ONE
Executive summary
From 7.5 children per couple to just 1.6

China’s birth rate has experienced a rapid and sharp fall. It took only 11 years for the fertility rate to
tumble from six births per woman in 1967 to fewer than three in 1978. With the introduction of the
one-child policy, the rate continued to slowly decline, falling below the replacement rate by 1992. China
experienced its lowest total fertility rates—hovering around 1.65—between 2006 and 2015, before
climbing slightly to 1.7 in 2016 with the implementation of the two-child policy. While the fertility rate
remains low, China’s aging population is growing and family sizes are shrinking. This demographic
reversal places a tremendous burden on public services. By 2030, 24% of China’s population will be over
60, rising to 38.5% in 2075.
Key drivers behind China’s falling fertility levels

After the 1990s, the explicit and implicit costs of parenthood, such as financial outlay and impact on
women’s careers, became a major factor in lowering the fertility rate. These include:
1. Continued gender inequality in child rearing and familial duties. Despite high female labour
force participation, women still do the vast majority of household chores.
2. An improved education system has delayed marriage and age at first childbirth, which further
reduces the possibility of subsequent children.
3. Work-life balance strains have increased, especially the financial pressure of obtaining housing.
These strains act as an impediment to building a family.
4. The large “floating population” of migrant workers who are less willing to have a second child
due to the associated cost.
The second-child policy and supporting initiatives aim for 1.8 by 2020
It was announced in October 2015 that all married couples could have two children. Regional initiatives
were introduced in 2017 to support the implementation of the new second-child policy. These
initiatives mainly focused on extending paid maternity and paternity leave and constructing public
health and childcare facilities. The 98 days of paid maternity leave has been extended to 128 days and—
in some provinces—up to one year. Likewise, paternity leave now lasts from 7 up to 30 days.
The continued delay of first child births remains an issue

The second-child policy partially compensated for the decline in first-child births in 2016 and 2017.
Births in 2016 jumped by 1.31 million from the previous year, up to 17.86 million, the highest figure
since 2000, but then dropped to 17.23 million in 2017. However, the birth of the first child among
couples continues to be delayed in both rural and urban settings. This can often be explained by the
postponement of marriage. Other reasons why the second-child policy has so far had a limited impact
include:
1. A lack of childcare resources for children under three and limited childcare leave.
2. The ongoing high economic burden of having children.

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3. A one-child culture has emerged, and existing family members do not necessarily want a second
child.
4. Employers comply with existing labour law—which they’re obliged to do—but do not
necessarily support other initiatives.
The growing role of assisted reproductive technologies

Assisted reproductive technology (ART) is an umbrella term for a range of medical interventions that
can give infertile couples a chance of having children. By the end of 2016, there were 451 approved
ART centres in China. Fertility treatment is not covered by public insurance, but willingness to pay is
relatively high compared to the monetary cost of ART services. On the other hand, physical accessibility
to clinics remains a major issue as most reputable clinics are clustered in Tier 1 cities. The licenses of
ART clinics and oocyte donation are highly regulated and strictly controlled, while the quality of ART
physicians’ training remains a concern. Unmet reproductive needs can drive people to resort to looking
overseas or going through unregulated channels.
Conclusion and recommendations

It is predicted that China’s total fertility rate will remain from 1.6 to 1.7 for the next few years but is
unlikely to reach the stated goal of 1.8 children per woman. The UN projects that China’s population
will peak at 1.44 billion in 2030, then start to decrease, but still remain above 1 billion by 2100. China is
therefore not running out of citizens anytime soon. Rather, population policies are needed in order to
balance the country’s demographic structure; to offset an ageing population. The evidence suggests
that governments can improve fertility rates by packaging together several well-funded, long-term,
interconnected programmes. We believe effective policy packages in China can be built upon four
principles:
1. Support local governments in their implementation of fertility policies: Provide sufficient
backing to local governments who seek to improve upon existing standards set by national
labour law. Improve the enforceability of guidelines and initiatives set out by local governments.
2. Support family life at all stages: Ensure that support systems work for families at all stages,
from pre-conception, to childbirth and parents’ eventual re-integration into the workforce.
Improve policies for having children, raising children and for life as a parent.
3. Break down barriers to ART: Improve access to assisted reproductive technology alongside
bolstering the quality of service. Offering financial support for ART should be considered.
4. Remove limitations on how many children a family can have: The limited quota for the
number of children a family can have remains an issue for some families, and arguably sends out
the wrong message to the wider population.

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Introduction
C hina’s birth rate has experienced a rapid and sharp fall, down from a total fertility rate of
approximately six births per woman in 1970, to under two today.1 Today’s actual fertility rate
remains somewhat uncertain. In 2016, the National Health and Family Planning Commission (NHFPC
2016) stated that the national fertility rate was 1.7, while others have suggested that the real rate is even
lower.2, 3 Either way, old age dependency is rising fast and family sizes are shrinking. This demographic
reversal places a tremendous burden on public services. The proportion of the population that is in
the workforce continues to fall, while pension and healthcare costs remorselessly rise.4 By 2030, 24% of
China’s population will be over 60, rising to 38.5% in 2075.5
There are a number of reasons for this fall in fertility. Drivers include the housework gender gap,
poor work-life balance, postponement of marriage and pregnancy, and the increasing prevalence of
families being comfortable with just having one child.
To try and address falling fertility levels, China has initiated the “comprehensive two child policy”.
Alongside this, the government has implemented a series of initiatives to support raising a family.
Family-friendly policies, such as offering parental leave, allocating resources to pregnancy-related
healthcare, and funding childcare centres, have been used to improve work-life balance and subsidize
child-related costs. Alongside these policies, an emerging area for policy intervention is in assisted
reproductive technology (ART), an umbrella term for a group of medical interventions that can help
address infertility problems.
This report examines the options available to Chinese policy-makers in their efforts to reverse
declining fertility. We consider the main drivers behind the fall in fertility and look at what impact
family-friendly policies have already had in China. We describe four case studies—Singapore, South
Korea, Australia, and Hong Kong—to see how they are managing similar challenges. We also review
the global evidence-base on the effectiveness and economic impact of family-friendly policies and
ART. From this exploration of the literature, we offer some thoughts on China’s fertility challenge and
propose ways in which the government could approach policymaking in this area.

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purpose of giving birth and taking care of the

Some key definitions
infant. Maternity leave may last anywhere from
several weeks to a period of months depending on
Total fertility rate (TFR) represents the number
the organization, and may be paid or unpaid 6. It
of children that would be born to a woman if she
is granted to mothers for a limited period directly
were to live to the end of her childbearing years
before and after childbirth.7
and bear children in accordance with age-specific
Paternity leave a period of absence from work
fertility rates of the specified year.
granted to a father after or shortly before the birth
Replacement rate is the TFR at which women
of his child.
give birth to enough babies to sustain population
Parental leave is a period of approved absence
levels. The replacement rate is commonly
for a parent to care for newborns or young
considered to be 2.1 children born per women.
children.7
Old-age dependency ratio is the ratio of the
Childcare leave is a period granted to
population 65 years or over to the population aged
employees having minor children below a certain
15-64, presented as the number of dependents per
age, for taking care of children whether for rearing
100 persons of working age (15-64).
or to look after any of their needs like medical
Maternity leave is a period of approved
appointments, ill health etc.
absence for a female employee granted for the

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China’s falling fertility rate
From 7.5 children per couple to just 1.6

During the 1950s and 60s, the total fertility rate in China remained for the most part at 6 and above.8
Following these two decades however, it took only 9 years for the fertility rate to fall from more than
6 in 1968 to fewer than 3 in 1977. With the introduction of the one-child policy the rate continued to
slowly decline, falling below the replacement rate by 1992. China experienced its lowest total fertility
rates—hovering around 1.65—between 2006 and 2015, before climbing slightly to 1.7 in 2016 with the
introduction of the two-child policy (Figure 1).
Because of increases in life expectancy, most of those born during the fecund fifties and sixties will
survive to old age. The World Health Organization defines an “ageing society” as one in which more
than 7% of the population is 65 years or older,9 and in 2000 China officially hit that threshold.4 By 2017
there were 158 million people over 65; 11.4% of the total population. The Office of the National Working
Commission on Aging’s projections suggest that China’s population over 65 will be “above 300 million in
2033, 400 million in 2050, and reach a peak in 2058” (Figure 2).
Elderly people require more healthcare services than their younger kin, and the cost of medical
treatment, care and service as share of GDP in China is predicted to increase from 6.97% in 2015 to
21.77% in 2050, a figure higher than that of many developed countries.4 The aging population will also
affect the financial stability of some families. According to the 2010 census questionnaire, most elderly
people in China rely on their families, one quarter of them depend on pensions, and about one in
five (especially rural residents) continue to work.10 As the aging population increases, the pressure to
Figure 1: Total fertility rate for China, Singapore, South Korea, Australia and Hong Kong SAR,
China from 1950 to 2016
Australia China Hong Kong SAR, China Singapore South Korea World
8.0 8.0
7.0 7.0
6.0 6.0
5.0 5.0
4.0 4.0
3.0 3.0
2.0 2.0
1.0 1.0
0.0 0.0
1960 65 70 75 80 85 90 95 2000 05 10 15
Source: Fertility rate, total (births per woman), The World Bank (Singapore, South Korea, Hong Kong SAR, Australia, World), China Population
and Development Research Center (China).

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provide will therefore continue to fall on working members of the family. And this at a time when the
working age population, those aged 15-64, is starting to shrink. By 2050, the working population will
fall to 795 million people, about 204 million less than it was in 2010, leading to a shortage of supply and
increasing labour costs.4
Figure 2: Population distribution by age group and old-age dependency ratio of China from
1990 to 2030
Population aged 65 and over; left scale
Population aged 15-64; left scale
Population aged 0-14; left scale Old-age dependency ratio (%); right scale
160,000 32.0
140,000 28.0
120,000 24.0
100,000 20.0
80,000 16.0
60,000 12.0
40,000 8.0
20,000 4.0
0 0.0
1990 92 94 96 98 2000 02 04 06 08 10 12 14 16 18 20 22 24 26 28 30
Sources: National Census Bureau; China National Bureau of Statistics, and EIU calculations.
The fertility rate had already more than halved by the time of the one child
policy
This historical fall in fertility rates in China had a number of drivers. After the 1970s, the sharp decline
of the fertility rate from 6.45 in 1968 to 2.84 in 1977 was accompanied by a reduction in the under-five
mortality rate from 119.4 per 1,000 live births in 1969 to 74.9 in 197711 and the implementation of family
planning.4 Professor Zheng Zhenzhen, from the Institute of Population and Labor Economics at the
Chinese Academy of Social Sciences, concludes that this rapid drop was mainly related to 1) national
implementation of birth control, 2) improved health care access, especially in the control of infectious
diseases and decreased infant mortality rate, resulting in more children reaching adulthood, and 3) the
Great Leap Forward and People’s Commune Movement in 1958, which pushed more women out of the
house and into the workforce in the 1960s.
By the time the one-child policy was introduced (between 1978 and 1980), the fertility rate had
already more than halved from its post-war peak. Instead of a clear further decline, the fertility rate
after the adoption of the one-child policy rather fluctuated over the years. Professor Wu Fan, Deputy
Chairperson from the Department of Social Work and Social Policy at Nankai University, commented
“it is difficult to predict how many births were truly affected by the one-child policy”. She went on
to remark that “Quality over quantity has been the prevailing trend. After the 1990s, the explicit and
implicit costs, such as financial outlay and impact on women’s careers become a major factor in
lowering the fertility rate.”

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A woman’s work is never done

Despite high labour force participation, Chinese women are still outworking men at home. China has
a high female labour participation of 61.5% in 2017, compared with 60.5% in Singapore, 54.0% in Hong
Kong, 52.2% in South Korea, and 50.5% in Japan.12 But China now ranks 100th out of 144 countries
for gender parity, falling for ten consecutive years since 2008, when it ranked 57th.13 Professor Zheng
echoes that “the traditional concept of ‘caring for the family is solely a woman’s duty’ is still entrenched
in China”. Childcare is mainly undertaken by mothers (whether in the work force or not) and the vast
majority of hours spent on household chores and child-rearing are done by women. According to the
recently published China Family Development Report, nine out of ten “primary parents” of children
below five are women.14
Therefore, when conflicts between family and work occur, it is nearly always the woman who
must give up her career aspirations to fulfil family needs. This iniquitous division of child rearing and
familial duties negatively affects many women’s fertility intentions. However, although “China has not
established a systematic family-friendly policy”, pushing women back home will not solve the fertility
problem, argues Professor Wu. She points to the example of Germany, where subsidies are used to
encourage women to quit their jobs and spend more time taking care of kids. But still, she explains, a lot
of women insist on staying in the labour market and hence the fertility rate is relatively low compared
to some EU countries. Other countries in Europe, such as in Scandinavia, “utilize family policies centred
around gender equality; men and women both receive governmental support to keep both their work
and family lives, and their fertility rate is high.”
Professor Zheng also stated that “Globally, many countries which face ultra-low birth rates have
conservative cultures with entrenched gender roles. Rigidity in the division of child rearing duties
between men and women are prominent in countries like Japan, South Korea, Spain and Italy.”
Therefore, our interviewees argued, a root solution to increase China’s fertility rate is to improve
gender equality.
More schooling, leading to later marriages and fewer births

The fertility decline, especially for the birth of the first child, has been accompanied by a delay in
marriage and childbirth. The marriage rate of Chinese women between the ages of 20 and 34 has
dropped from 75% in 2006 to 67.3% in 2016. The age at first marriage of females has simultaneously
risen from 23.6 years in 2006 to 26.3 years in 2016, and the age at first birth from 24.3 years to 26.9 years.
The reason behind this delay in marriage and childbirth is largely attributed to the improved
education system. Longer time spent in education and the pursuit of career development post-
qualification inevitably postpones marriage and childbirth. “The proportion of students entering
university is ever rising, while the number of years of education is increasing”, explains Professor
Zheng. “Marriage often occurs after university graduation; hence the average age of marriage is being
pushed back. Besides, after graduation, women with high educational qualifications pursue personal
development and career attainment. It usually takes time to build a career before considering starting
a family. Pregnancy and breast-feeding distract them from work, which further delays their first
childbirth age.”

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Work-balance strains mean many families are surviving rather than flourishing
The breakneck speed of economic growth in China has forged a culture lacking work-life balance.
This has a significant effect on young women who seek to have children. According to one large-scale
survey on desired fertility conducted by the National Health and Family Planning Commission in 2015,
parents who had decided not to have a second child reported that this was because of 1) the economic
burden (74.5%), 2) the extra work involved, on top of their already stressful jobs (61.1%), and 3) the
insufficient childcare support system (60.5%). Professor Zheng agreed that “China lacks mechanisms
to modulate work-family balance. A lack of flexible working arrangements and high-quality child care
services negatively impact the childbearing decisions of women.”
The high economic pressure on housing in tier 1 and 2 cities also acts as an impediment to building
a family. In recent years, housing developments have ballooned, and house prices have rocketed. From
June 2015 through to the end of last year, the 100 City Price Index of China rose 31% to nearly $202 per
square foot, which is 38% higher than that in the US, where per-capita income is more than 7 times
higher.15 As a result, most housing is too expensive for the average Chinese family to finance.16 Professor
Zheng stated that “difficulty in purchasing a house negatively impacts household fertility decisions.
Policies that provide housing loan subsidies, better employment, and economic security can alleviate
the situation.”
Urbanization and the floating population

China continues to witness an urban transition in which large numbers of people have shifted from
agricultural employment to industrial, commercial, or service employment.17 Under the economic
reforms of the last three decades China has unwittingly created a “floating population” of 247 million
people, accounting for 18% of the total population.18 The size of this transient population is rising
sharply still, as more people are moving towards the coastal cities.19 A number of studies show that
a floating population contributes to fertility decline.20-22 One study found the total fertility rate being
25% lower in migrant populations compared to non-migrant populations, with the difference further
exacerbated by a higher average age of first childbirth among migrant populations.20-22 According to
Professor Zheng, “economic migration significantly delays the first marriage age of mobile populations
as well as the first child-birth age of migrant women.” Further to a delay in having a first child, the
willingness of migrants to have a second child is also weaker, mostly because of the associated costs.23

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The policy response
From a one-child policy to a two-child policy

The relaxation of one-child policy began in 2013, when couples in which at least one of the pair
was themselves an only child, were allowed to have a second child.24 Then in October 2015, China
scrapped the last remnants of its strict one-child policy. All married couples irrespective of their Hukou
(certificate of residency) could now have two children.25 Through this reform, 90 million women have
become eligible to have a second child.26
Alongside the relaxation on the number of children allowed, a series of initiatives were introduced
in 2017 that aimed to support “the implementation of a comprehensive two-child policy” to reach
a fertility rate of 1.8 by 2020.27 Updated policies mainly focus on extending and authorizing paid
maternity, parental, and paternity leave, and constructing public health and childcare facilities. Public
health services have been strengthened for obstetric and paediatric departments, and new pathways
introduced for high-risk pregnant women. Baby care facilities are now required for baby feeding and
nappy changing in both public spaces and business settings.
Since the abolishment of the one-child policy, China’s National Health and Family Planning
Commission reported that births in China jumped by 1.31 million from the 2015 level to 17.86 million,
the highest figure since 2000, but then dropped to 17.23 million in 2017. The second-child policy partially
compensated for the universal decline in first-child births. Around 51.2% of China’s new-born babies in
2017 were second children in the family, an 11% increase from 2016. Indeed, this ratio has been climbing
since 2002, which is mainly attributed by the continual decline of the first child percentage, mostly due
to the increasing number of unmarried women.28 This trend started in urban regions and is gradually
expanding to the rural population.29
The change to a second-child policy has only impacted a small demographic

The two-child policy has only made a difference to a relatively small number of people, mostly between
the ages of 38 and 40. Professor Zheng noted that women from different age cohorts had their own
reasons for not being influenced by the change in policy. For example, “women born in the 1960s or
early 1970s are past fertile age; they believe childbearing should happen within the right age”. Then
moving on to people born in the 1980s, they are “in their critical moments for career progression and
are unlikely to prioritize a second child, while those born in the 1990s are more independent in thinking
and are unlikely to adhere to government recommendations”.
Furthermore, even for couples in their late 30s who wanted two children, many “already had a
second child and paid the penalties before the implementation of second-child policy”, explained
Professor Zheng. This is because the penalties of the previous one-child system were not consistently
applied, with wide variations across the country.30 The policy was strictly enforced only for urban
residents, who accounted for less than half of the total population in 2007. Indeed, Professor Yang told
us that “the people who come to our IVF clinics for a second child are usually urban citizens between
the ages of 38 and 40. Most couples under the age of 40 usually try on their own.”

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The biggest benefactors of the second-child policy are public sector employees born in the late
1970s. These families were previously held back by the one-child policy. “They had the economic
capabilities and family support, and have the highest likelihood to have a second child”, explained
Professor Zheng. Professor Yang Dongzi, from the Sun Yat-Sen Memorial Hospital, confirmed that
“after introduction of the second-child policy, the outpatient volume at ART centres increased
significantly, especially in those over 40.” But she also mentioned “the increase in outpatient volume is
temporary, only in these two years. The increase in our IVF cycles between 2016 and 2017 was around
25%, while in the latter half of 2017, the uptrend has slowed down.”
Maternity leave has been extended but varies by province and is funded by
employers
Many of the 2017 initiatives introduced to support the two-child policy are implemented at a regional
level, and each province has revised their regional regulation on population and family planning.
China’s national parental leave system includes 98 days of paid maternity leave with the payment
based on the average wage of the company funded by maternity insurance. Meanwhile, women with
special conditions, such as obstructed labour or multiple births, can further apply for an extension of 15
days. The revised provincial regulation on population and family planning extends the paid maternity
leave from between 128 days to 180 days. As for fathers, the paid paternity leave lasts from 7 up to 30
days (Table 1). Women are entitled to be absent from work for one hour per day for breastfeeding
without it impacting on their salary.
Table 1 Maternity, Paternity and Parental Leave Policy

Paid maternity % average Paid parental % average Paid paternity % average
leave (days) payment rate leave available to payment rate leave (days) payment rate
mothers (months)
National level (Labour 98
Law)
Beijing +30 100 N/A*1 N/A 15 100
Shanghai +30 100 N/A 80 10 100
Guangdong +80 100 N/A Negotiate with 15 100
employers
Zhejiang +30 100 N/A N/A 15 100
Fujian +60~82 100 N/A N/A 15 100
Anhui +60 100 N/A N/A 10 or 20 for long 100
distance couples
Chongqing +30 100 12*2 75 (no less than 15 100
the minimum wage
standard)
Heilongjiang +82 100 N/A N/A 15 100
Yunnan +60 N/A N/A N/A 30 N/A
Gansu +82 100 N/A N/A 30 100
*1 Public sector employers can enjoy a further 1~3 months extension under the permission
*2 Requires employer’s permission

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However, “extending maternity leave alone is too limited to improve fertility”, commented Professor
Wu. This is because maternity insurance is funded by employers, which increases the economic burden
of companies when hiring female employees. Professor Wu went on to say that “extending maternity
leave is a dilemma for career women. It increases the difficulty for female employees to apply for a
job due to an invisible stigma. It also becomes a struggle to pick up from where they left off before
pregnancy due to the fast pace and intense competition at the workplace.” Professor Zheng also
pointed out that “a better way is paid child-care leave or flexible working hours. Family-friendly policies
should be supported by the labour market and prevailing work culture.”
Professor Yuan described that even though maternity and paternity leave is extended in the local
regulations of population and family planning, they are merely regulations and not enshrined in the
national Labour Law. “Employers stick to the Labour Law compliance. All the institutions need to
cooperate with the Office of Family Development to ensure the initiatives are truly implemented.”
Child care support for children under three years of age is in short supply
One of the primary reasons that Chinese people choose not to have a second child, despite the
two-child policy, is the lack of childcare resources. These include paid child care leave with flexible
working hours, subsidies, or facilities for children under three. Professor Yuan, Director of the Center
for Strategic Studies on Ageing at Nankai University, pointed out that “China has nearly no childcare
facilities for children between 0 and 3 years of age.” Only 4% of children up to three are in childcare
facilities in China, well below the OECD average of 34.4%.31 Grandparents play a significant role in
raising young children at home. Professor Wu informed us that “though taken care of by grandparents,
children at this age rely strongly on their mothers. The major barrier of having a second child is that we
have neither paid childcare leave nor enough alternative social resources to take care of children”.
More specifically, Professor Wu stated “there is no detailed regulatory standard for childcare services
for children at that age. Both the public or private sector could take the lead in developing practice
standards, but as of now there is still little progress”. The government is however taking some action
by investigating methods to fulfil the shortage of affordable and reliable kindergarten and day care
services.32 One example is Shanghai, which has published regulations of early childhood education
service management. This has set an industry standard in both construction guidelines and the
qualification of teachers of childcare facilities 33. Professor Wu remarked that the Shanghai case is “a
breakthrough and a good start”. There are other examples. Professor Zheng informed us that coastal
areas often have good policies on supporting fertility. For example, “Zhejiang province funds ‘mommy
cottages’, which provide small group day-care for female employers, and some manufacturers in
Jiangsu have their own kindergartens”. However, in general Professor Wu declared that more detailed
industrial standards under the government’s supervision on child care facilities for children under three
years of age are required as soon as possible.
China’s tax system remains skewed towards individual taxation

Another commonly reported barrier to having a second child is the economic burden. Some initiatives
are designed to help with the financial impact on families. For example, Xiantao in Hubei province
provides 1,200 RMB for a second child and Tianjin funds additional thirty days’ maternity allowance,
as well as housing subsidies, and flexible working hours before and after pregnancy. In other areas,
subsidies are in the form of tax relief34 or prolonged maternity leave payment.35
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While better funded childcare services and other initiatives may go some way to easing the cost
to parents, many commentators remarked on China’s tax system. China still uses an individual-
centric income tax system, rather than one based around a whole family’s income level. Professor
Yuan suggested that “the threshold of personal income tax should consider the size of the family
unit.” Supporting this idea, Professor Wu agreed that “technically, it can be tackled to provide some
tax breaks to families with elders and children.” Taxation is already complicated in China, but more
generous tax breaks and other measures for families may help more people reach the decision to have
a second child.
Assisted reproductive technologies are expensive but couples are often willing
to pay
Family-friendly policies are not the only levers available to national governments to raise fertility rates.
Governments can support access to assisted reproductive technologies (ART), a range of technologies
that can help people who are willing but struggling to have a child.
The prevalence of infertility in China is 15.5% among couples of reproductive age.36 Infertility is a
heavy burden, exacerbated by the trend of delaying marriage and having children.37 In China, ART
treatment is often best conceived as an active effort to achieve the “must have one child” due to the
intense stigmatization of childlessness.38 While there is no official number of IVF babies in China, a 2016
article estimated that there have been 2 million IVF births in China since the arrival of China’s first IVF
baby in 1988.38
Large scale ART centres are becoming commonplace in China. By the end of 2016, there were 451
approved ART centres. The largest clinic, in Changsha, conducted 44,596 cycles in 2017, more than the
cycles usually carried out in mid-sized European countries. Professor Yang stated that “compared to
other countries, China has good quality ART outcomes. Our technology is among the world’s best.”
The figures support this assertion, as outcomes are comparable with many high-income countries. For
example, the clinical pregnancy rate in Peking University Third Hospital from 2011 to 2014 is similar to
the US rate, published by the Centers for Disease Control and Prevention.39
Other than a medical intervention to help infertile couples to achieve pregnancy, ART centres also
host education programmes on reproductive knowledge. Males are taught about healthy lifestyle
choices and females about contraception and how to prevent the abuse of abortions. Programmes
include “Baby Fund”, run by the China Women’s Development Foundation launched in 2014,40 which
provides a series of lectures providing psychological assistance and infertility treatment education, free
drug distribution, and poverty support to infertile women.41
The estimated cost per IVF cycle is around 30,000 RMB and 40,000 RMB for ICSI.38 Fertility
treatment has traditionally not been covered by public or private insurance in China, but as noted
by Professor Yang, “people are willing to pay.” ART in China is thus not considered inaccessible by
physicians and patients despite its relatively high cost. However, while ART funding is rare in China, it is
not unknown.42 For example, in order to facilitate the second-child policy, local government in Shihezi,
a city in northwestern China’s Xinjiang region, recently issued a policy to provide a one-time incentive
of 10,000 RMB to fund IVF treatment for a second child. In Guangxi, families can receive a cumulative
subsidy of up to 50,000 RMB for fertility assessments, assisted reproductive treatments and other
diagnostic procedures. Similar subsidies offered by local governments are becoming more common,
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with areas like Fujian, Hubei, Hefei and Liaoning having such programmes. When asked whether ART
should be widely reimbursed in China, Professor Yang answered “it’s understandable that ART is not
reimbursed, since the reimbursement might bring problems such as the unbalanced distribution
of public resources. It might also be difficult to identify which patients are qualified to receive the
infertility treatment”. Nevertheless, the professor went on to say that “overall, it is better than nothing.
ART reimbursement is a good thing.”
ART centres are highly regulated, but quality is variable

Though cost is not perceived to be a significant issue, the accessibility of ART clinics remains a major
issue in China. The clinics providing ART have to live up to a series of strict requirements including
equipment, procedures, and personnel in order to be licensed. Meanwhile the number of clinics
are restricted based on the rule that one clinic serves 3 million population, compared with 700,000
people per clinic in the United States.43 Also only Class 3 hospitals (tertiary hospitals of at least 500
beds) can provide pre-implantation genetic diagnosis (PGD), the genetic profiling of embryos prior to
implantation.44 Therefore, IVF centres in class 3 hospitals are often over-stretched.
Although the licenses of IVF clinics are stringently regulated, their quality remains a concern. The
technical evaluation for ART centres is only based on the job title of physicians, to see whether the
obstetrics and gynaecology physicians have other senior positions or have trained in ART centres. “But
the training quota is limited and the quality is worrying”, remarked Professor Yang. “To get an ART
certificate, an obstetrics and gynaecology physician doesn’t have to go through a national test, and all
the evaluations are internal and do not contain any surgical operations. An obstetrics and gynaecology
physician can prescribe IVF drugs after staying in an ART centre for three months. But in Hong Kong, it
takes years and countless exams for an obstetrics and gynaecology doctor to become a reproductive
doctor”. Therefore, she suggested that China needs to open more IVF training centres and improve
the training quality for ART physicians. The argument is that as long as ART doctors are qualified, the
number of ART centres should not be restricted. Doctors can spread out and open more IVF clinics.
Then patients will not need to flow to centralized, public-funded ART centres. Access to ART would
become simpler, meaning patients spend less time and money on traveling, and hence their indirect
costs such as loss of working hours would be lowered.
An overarching concern is that having one child has become a norm for many
families
Regardless of the new wave of policies, forty years of the one-child policy has resulted in the social
norm that one child is enough. The first generation of only-children have now become parents and
have “not experienced the benefit of multi-child families, and hence they might prefer not to have two
or more children”, said Professor Yuan. Coupled to this, more parents are respecting their first child’s
opinion on whether or not to have a sibling, and “70-80% of the time the answer is no”. Additionally, he
pointed out that some grandparents are not willing to raise the second child and prefer more leisure
time. Therefore, even though the one-child policy is officially abandoned, its influence remains on
people’s mindset, leading to many of the younger generation being reluctant to have a second child.

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How have other regions responded to falling

fertility?
W e’ve described how supporting initiatives for the second-child policy in China have mainly
focused on extending maternity leave. There are other elements Chinese policymakers may
wish to consider, including parental and child care leave, baby bonus, child care services and subsidies,
and ART policy, making them a series of holistic measures of family friendly policies. Here are some
examples of policy implementation from four case study regions: Singapore, South Korea, Hong Kong,
and Australia.
Family policy packages in Singapore

The Singapore government introduced the “Marriage and Parenthood Package” (M&P Package) in 2001,
and strengthened it in 2004, 2008, 2013, and 2015.45 The package compromises of housing, community
and workplace support, pre-school and education, better health, and childcare.45 Standards on flexible
work arrangements have also been introduced, aiming to help employees and job seekers recognize
companies with flexible practices. The work-life grant was set up to support the adoption of flexible
work arrangements, and currently 77% of establishments provide ad-hoc flexibility to employees.46
These arrangements may have contributed to the relative high (and increasing) female labour force
participation rate of 60.5% in 2017, compared to 54.0% in Hong Kong, 52.2% in South Korea, and
50.5% in Japan.47 In addition to encouraging flexible work, the government set up the Building and
Construction Accessibility Fund to cover up to 60% of construction costs to upgrade private buildings
with family-friendly features, including nursing rooms.45
Parental and child care leave in Australia, South Korea and Singapore
Australia’s paid parental leave scheme includes 18 weeks of child’s primary carer and two weeks of
partner leave. The scheme is funded by the government and currently runs at AUS$719.35 per week
before tax, based on the weekly rate of the national minimum wage.48 On top of the government
funded scheme, employers can also provide paid parental leave based on registered agreements,
employment contracts and workplace policies.49
South Korea entitles working mothers 90 days of paid maternity leave, funded by employers for the
first 60 days, and then Employment Insurance for the remaining 30 days with a monthly ceiling of 1.35
million won. Employers need to make up any shortfall. Fathers receive six weeks paid paternity leave.
Parents are also allowed to have 52 weeks of paid parental and home care leave. However, employers
don’t have a legal obligation to pay employees during the leave period unless company rules mandate
it. Employees themselves are obliged to request the benefits, which are 40% of ordinary monthly
wages.50
In Singapore, working mothers are entitled to 16 weeks of paid maternity leave, four weeks of which
can be shared by fathers. This leave is jointly funded by the employer and government. Fathers receive
two weeks of paid paternity leave, funded solely by the government. Additionally, employees are
entitled to up to four weeks unpaid leave for immediate family members with unexpected care needs.45
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Singapore also provides an example of child care leave. Parents have access to six days of unpaid infant
care leave per year with children below two years of age, six days of Government-Paid childcare Leave
per year with children under seven years of age, and two days per year with children from 7 to 12 years
of age.
Baby bonus in Singapore

Government financial support to families in Singapore is increasingly generous and incorporates a
baby bonus consisting of cash gifts and co-savings. The cash gift contains S$8,000 per child for the first
and second child, and S$10,000 per child for the third child onwards. The co-saving scheme, named
the Child Development Account, provides S$6,000 for the first and second child, S$12,000 for the third
and fourth child, and S$18,000 for the fifth child and beyond.45 Other than the baby bonus, there are a
range of tax measures, including tax rebates and tax relief. Parents are eligible to claim the Parenthood
Tax Rebate of S$5,000 for their first child, S$10,000 for the second child, and S$20,000 for the third and
each subsequent child.
Child care services in Hong Kong and South Korea

Hong Kong has the world’s highest enrolment rate of 100% for kindergarten education.51 Other than
childcare services, there are childcare services on full-day, half-day or a two-hour sessional basis for
parents with sudden engagements or various commitments.52
South Korea has increased the number of national, public and company day-care centres by
410 in 2017. Of the children in these centres, 32% are those of parents with unpredictable working
constraints.53 The government has also increased subsidies of 200,000 to 220,000 won to improve the
working environment for child-care teachers.31
Child care subsidies in Hong Kong and Australia

The cost of raising a child from birth to university graduation in Hong Kong is estimated to be up to
HK$5.5 million.54 In recognition of this financial burden on parents the government has increased its
financial commitment over recent years, and the expenditure on subsidizing kindergarten education
has increased from about HK$1,600 million in the 2007/8 to about HK$3,400 million in 2014/5.51 Hong
Kong enhanced the supply of childcare services by introducing the Pre-primary Education Voucher
Scheme (PEVS).55 The scheme provides a direct fee subsidy of up to HK$20,010 per student per annum
(figures correct for 2014/15) for children attending eligible local non-profit-making kindergartens.
A total of 35,632 families have enjoyed fee remission as of January 201551 and around 80% of the
kindergarten students receive voucher subsidies.51
Australia also sets a good example of child care benefits. The government has increased spending
on supporting families with children over the past 25 years, from 0.9% of GDP in 1980 to 2.9% in 2014.56,
57
The government provides family tax benefit with upfront or annual payments.58 From 2 July 2018, the
Australian Government provided childcare benefits and rebates for children below 14 years of age with
payments based on the family’s income, the activity level of both parents, type of child care service
and whether the child attends school. The new childcare subsidy is better targeted than the previous
single, means-tested one that covers 50% of out of pocket child care expenses, up to an annual limit
of AUS$7,613 per child. Parents have to be working, volunteering, studying or looking for work to
be eligible for the new subsidy.59 Other than the childcare subsidy, the Australian government also

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provides additional funding to grandparents and parents who are looking for work or in temporary
financial hardship.60
ART and ART policy in Australia and South Korea

One in six Australian couples use IVF and one in every 25 Australian children are now born as a result
of IVF.61 Services related to an ART treatment cycle (without a number cap or age limit), including
consultations, pathology, and diagnostic imaging services, are partially covered by Medicare.62 There
were 68 ART clinics and 66,347 cycles in 2011, said to have met 100% of demand.63 The cost of one
IVF cycle in Australia is approximately $9,495 (19% of the annual disposable income compared with
12% in Japan and more than 100% in China), with AUS$4,707 of out of pocket costs (6% of the annual
disposable income after the government subsidization).64, 65 Heterosexual couples, lesbian couples and
single women all have access to the publicly funded ART program.63
South Korea provides sliding support for infertility treatment costs according to income level (with
caps on the total amount and number of cycles). From 2006 to 2015, 100,993 babies were born to
parents who received state support for their infertility treatments.66 The direct cost of a fresh IVF cycle
is less than US$2,000, the lowest among a comparison of 32 countries.67 Since 2006, South Korea has
adopted an incremental approach in developing subsidies for infertility treatments. In its maiden year,
patients were subsidised for two cycles only. This increased to three cycles in 2009 and four cycles in
2011. Furthermore, before 2010, subsidies were available only to families earning less than 130% of the
average household income. This threshold was increased to 150% in 2010. Most recently, South Korea
doubled the subsidies available for IVF between 2016 and 2017, up to a total of 2.4 million won per
cycle.68 Beyond subsidies, the health insurance coverage for infertility treatment has also recently been
expanded with the goal of providing a universal support system to strengthen counselling, treatment
and psychological support.68 To support these policies, the budget has been increased from 31.5 billion
won in 2007 to 92.5 billion in 2016.66 Donation of sperm or oocyte is also permitted and regulated in
South Korea, although they’re “infrequently used”.69

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Evidence of effectiveness for policies from

the wider literature
Impact of family-friendly policies

When Chinese couples decide to have a first child their decision is centred on when, rather than if,
since nearly all married couples will have at least one child. Whether to have a second child is a bigger
decision.70 Family-friendly policies are designed to support the family unit by providing periods of
leave, flexible working schedules, and living support for working parents.71 Such policies can arguably
pay for themselves. For example, the family-friendly policies introduced by Nordic countries over the
past 50 years, and associated increases in female employment, may have boosted growth in GDP per
capita by 10% to 20%.72 However, Professor Wu cautions that while European examples of policy can
be instructive, their applications in China are limited due to the social differences between Europe and
China. She states that “it’s difficult to find policies that could be taken from one country and transferred
to another”. Research results must therefore be carefully studied to understand scope, qualifications,
and limitations.
Policy decisions can help address the lack of childcare, problems in balancing work and family life,
and other barriers to parenthood. While most of the available evidence suggests that individual family
policies generally have small effects on fertility rates, we describe here some examples where packages
of complementary interventions in other countries have made an impact.
Working hours and parental leave

After China’s birth control policies largely relaxed, Wang Feng pointed out “new programs are needed
to encourage young people to have children, but it will be increasingly difficult to fund such programs
since the unprecedented pace of economic growth inevitably slows down “.73 The initiatives in China
to support the second-child policy mainly focus on extending the length of parental leave. However, a
2017 Center for Economic Performance (CEP) study noted that the effect of parental leave on fertility
is “negligible”. CEP’s review also noted, however, that a study of Austrian policy change from one to
two years parental leave showed “substantial fertility effects of leave extension, accounting for 12
additional children per 100 women,” and that a German policy of paid maternity leave based on income
led to “sizeable fertility gains”74. A cross-national analysis suggested this may be because increasing
the duration and benefit level provided by paid leave policies increase rates of women’s labour
participation.75, 76
Child Care
Childcare services in China focus mostly on children between 3 to 6 years old. The lack of accessible
and affordable childcare for children below three years of age is one of the major factors affecting
fertility in China. Provision of childcare services is a “strongly positive factor in the decision to have
children”.77 Rindfuss and colleagues presented evidence that high-quality, affordable, worker-friendly
childcare leads to more childbearing. The effect is substantial, with evidence that moving from having

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no child-care slots available for pre-school-age children to having slots available for 60% of pre-school-
age children leads to the average women having between 0.5 and 0.7 more children.78 A study covering
30 OECD countries (including Japan, and South Korea) also found that early childhood education and
care spending for children under three years old had a “robust” positive correlation with fertility rate,
with one extra percentage point of GDP spending associated with 0.2 extra children per woman.74
Baby bonus
According to Professor Zheng, cash incentives to boost fertility are “the least useful”. Kalwij’s 2010
review of 16 Western European countries determined that increases in family allowance had “no
significant impact on the timing of births or on completed fertility”.79 Other authors have suggested
that financial transfers might influence the decision to have children if these transfers sufficiently
reduce the direct monetary cost of raising children.80 However, any such transfers need to cover
childhood for at least the child’s first year, as their influence is more significant during this period than
benefits granted at childbirth.81 Thévenon concluded that while child credits may have an impact, the
“policies are costly” , and therefore not cost-effective.77
Assisted reproductive technology

Since the first IVF baby in 1978, the number of people conceived by ART reaches several million today,
and rapidly approaches 0.1% of total world population.82 The affordability and location are major
barriers to access for this ART,82 and areas of the world with the highest rates of infertility are often
those with the poorest access to ART.83
A 2009 review showed that full access to IVF after three years increases the fertility rate by 0.08
children.84 Another study found that if the United Kingdom had similar ART coverage and utilization as
Denmark, the UK fertility rate would increase from 1.64 to 1.68 (or fall to 1.62 if ART was not available)
and concluded that the increase was equivalent to other more orthodox policies, and possibly more
cost-effective.85
The European Society of Human Reproduction and Embryology concluded in 2010 that though
ART’s impact on fertility rate is hard to evaluate due to a variety of biological and behavioural factors,
government ART support “is beneficial for families, but the effect on fertility rate is extremely small”.86
While opinions are varied on the overall effectiveness of ART in raising fertility rate, the potential
benefits for the many couples who have difficulty conceiving are self-evident.

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Discussion and recommendations
B y the end of 2017, China had 1.39 billion inhabitants, the largest population of any country in the
world. Although its annual net increase has reduced to 7 million, the population is still growing.
“China is not lacking people”, remarked Professor Yuan. The UN projects that China’s population will
peak at 1.44 billion in 2030, then start to decrease, but will still remain above 1 billion by 2100.87
Therefore population policies are not needed because of the danger of a shortage of people. Rather,
Professor Yuan emphasized, it’s because of the demographic structure, both macro and micro. At
the macro level, China faces an aging problem. At the micro level, the 4-2-1 family structure (families
consisting of four older people, paternal and maternal grandparents, two parents, and only one child) is
unsustainable. Couples have to support four seniors and raise at least one child, and seniors have always
been dependent on their descendants in China. How can China re-balance its demographic structure?
The evidence suggests that a number of interventions can, in the right context and settings, have
a positive impact on total fertility rates. High-income countries that have successfully maintained
sustainable fertility rates (without recourse to immigration) have tended to bundle together several
well-funded, long-term, interconnected programmes. Difficult though it may be to influence fertility
rate, governments have plenty of scope to make society a more welcoming place for young and old
families alike. From the research described in this report, we suggest there are four principles around
which successful fertility policies in China can be built (table 2).
Table 2: The principles around which successful fertility-raising policies can be designed, and
the actions that need to be taken to implement them.
Principles Actions needed
Provide sufficient backing to local governments who
Support local governments in their seek to improve upon existing standards set by national
1 implementation of fertility policies labour law. Improve the enforceability of guidelines and
initiatives set out by local governments.
Ensure that support systems work for families at all
stages, from pre-conception, to childbirth and parents’
2 Support family life at all stages eventual re-integration into the workforce. Improve
policies for having children, raising children and for life
as a parent.
Improve access to assisted reproduction technology
3 Break down barriers to ART alongside bolstering the quality of service. Offering
financial support for ART should be considered.
The limited quota for the number of children a family
Remove limitations on how many children a can have remains an issue for some families, and
4 family can have arguably sends out the wrong message to the wider
population.

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1. Support local governments in their implementation of fertility policies and

drive the development of legislation to support families
While the advent of the second-child policy is a good start, further actions can be supported on a
provincial level to work towards boosting fertility. Local governments have promoted a number of
initiatives on population and family planning, including extended maternity leave as well as paternity
leave, but most hirers stick to the national labour law set out by the central government. Without legal
backing from the central government it will remain difficult for local initiatives to gain momentum as
they are not enforceable.
Alongside support for current provincial level policies, detailed standards for childcare facilities and
ART practitioners are also needed. These standards will benefit from being created on a national level
as it ensures consistency and enforceability. From child safety to teachers’ qualifications, there is little
room to be lackadaisical when formulating how future generations will be treated in their respective
pre-schools and kindergartens.
2. Support family life at all stages and improve the support systems for having
children
Measures introduced with the explicit objective of supporting fertility, such as extending maternity
leave alone or cash subsidies, often have a limited impact. However, those measures designed to
support work-life balance or raise living standards have a more tangible impact on fertility, even though
this may not be their primary aim. Professor Wu pointed out that “raising the fertility rate does not rely
on short-term government regulations on giving birth, but instead needs to think about why people
don’t want a second child and look to solve their concerns.”
The iniquitous division of child rearing, lack of work-life balance, economic pressures, little support
for the floating population, and a shortage of childcare services or leave, are the reasons commonly
listed when couples decide not to have a child. “Raising a child is not only about giving birth; after birth,
you need to feed them, nurture them, and educate them” remarked Professor Yip.
China has laws against sex discrimination, including a rule that bars firms from firing pregnant
women until their child is at least one year old, but enforcement is lax.88 Cases have been reported
where many female job applications have been turned down, and many companies have blatantly
stated that they prefer women with two children already. This understandably leads to an unfriendly
working environment for females.40, 89
The government needs to therefore continue to institute a comprehensive, consistent, stable and
adequately funded package of policies which not only incentivises families to have children, but also
continues to support them in the child rearing years and after. While not a comprehensive list, policy
developments could include:
 The institution of a parental leave system that does not merely rely on the extension of maternity
leave. Instead provide more paternity and parental leave and, more importantly, arrange
workplace flexibility. This could include shorter and more flexible hours and easing the transition
for mothers returning to work.

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 Setting up an industrial standard of alternative social childcare resources for children aged up
to three years of age. For grandparents taking care of children, the government may consider
providing support, such as paid elder care leave or subsidies, allowing them to rest from time to
time.
A
n improvement on tax incentives for family-building and care for elders and children.
 Addressing the unequal roles of men and women related to household duties and childcare in
order to distribute this workload more evenly.
 Funding more generous family benefits that, when providing subsidies on parental leave, don’t let
the employers pay the full bill.
“Try to make China a place where everybody loves to stay, live, work, and enjoy their lives”, remarks
Professor Yip. “It’s a more realistic goal to improve the quality of life for inhabitants.”
3. Break down barriers to ART, as it can bring happiness to individual families

Assisted reproductive technology describes a range of medical interventions to help infertile couples
to have a child. It can consequently have a large psychological impact on the happiness of individual
families. Our interviewees acknowledged that ART’s price is high and its success rate is not perfect,
especially for older women. Nevertheless, given its role in improving awareness and offering the
opportunity for children to those who otherwise have little hope, it was suggested that financial
support for ART should be considered. As remarked by Professor Yang, “commercial ART-related
insurance and reimbursement can be encouraged, and if patients whose treatment is unsuccessful get
some compensation, then more people might be willing to undergo infertility treatment.”
To solve the accessibility of ART, other policies that China could consider implementing include:
 Approving more ART centre licenses and refining the regulation of ART centres, which should be
based around well-trained healthcare practitioners, rather than having the number of centres
calculated from the local population.
S
tandardising the quality of ART training through setting national evaluation standards on ART
cycles, operations (oocyte retrieval and embryo transfer) conducted, and examinations. In the
meanwhile, higher quotas for training positions can be implemented.
E
ncouraging commercial health insurance coverage and extending subsidies in the public sector
for ART.
 Promoting more policy and workplace support for ART, including paid leave and flexible
scheduling.
4. Remove current limitations on the number of children a family can have

With respect to improving fertility in general, Professor Yip pointed out that the two child limit remains
an issue. He remarked that “when you give people a choice, then things will be good.” Removing the
limits to the number of children which families can have is a boon for those who want to have more
children. Professor Zheng comments that “people who love kids would have three or four children but
are restricted by the two-child policy”.

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While current policy positions “encourage” more births by referring to low fertility levels and the
rapidly aging population, it is difficult to influence the sizeable portion of couples who are resolute
on having one child. Professor Yip shared that “we are currently losing the battle to boost fertility. It’s
difficult to reverse people’s mind sets”.
In view of the difficulty in changing the preferences of couples who prefer one child, raising fertility
could be better served by enabling couples with inherent desires for a larger family to indeed have
three or more children. Either way, the limit to the number of children a family can have arguably sends
out the wrong message to the wider population. Families are a blessing, and a restriction on the size of
them suggests to the world that they are viewed as a drain on the public purse.

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Appendix: Methods
T o investigate falling fertility levels in China, its key drivers and the range of possible policy
responses (including family-friendly policies and support for ART), The Economist Intelligence
Unit conducted a literature review and performed six interviews (one interviewee provided written
answers to our interview questions) with experts and a research institute.
Literature review
For the literature review we searched published and grey literature to identify relevant academic
studies and reports on fertility in China and the case study countries. We also performed a global
literature search for evidence of impact on fertility rate and economic outcomes for family-friendly
policies and ART. Database searches were performed in MEDLINE (PubMed) and Embase (Elsevier).
In addition to database searches we conducted grey literature searches, including searches of
relevant organisations’ websites. Supplemental search techniques such as reference harvesting and
citation searching were used to identify further research reports from “pearl” articles. The search was
pragmatic, iterative and targeted in scope, and was carried out by an experienced health information
specialist. References were managed in Endnote.
Case studies
Case studies were performed for Singapore, South Korea, Australia and Hong Kong, using data from
the literature review and supplemental searching. We summarise how these four countries have
responded to the challenges of falling fertility levels, including their policies on parental leave, child-
care, subsidies and ART. Because each country is unique, successful interventions cannot simply
be applied in China; similarly, failure of a policy in one country does not necessarily mean it will fail
elsewhere. Nevertheless, the comparative case study approach offers insights into the landscape of
possible approaches.
Primary research
We interviewed five experts in mainland China and one Hong Kong expert, Professor Yip, Paul Siu Fai
from the University of Hong Kong. Interviewees included expert voices from policy-makers, academia
(in demography and economics) and experts in ART. Interviews were semi-structured in nature, with
the questions varying slightly depending on the interviewee’s field of expertise. Transcripts were made
for all but one interview, where instead interview notes were kept. Direct and indirect quotes from the
interviewees are used throughout the report.
We have summarized current policy arrangements, costs and other data points throughout the
document using the most recent information available to us. We have made every effort to ensure that
such figures are correct at the time of writing—September 2018. However, these figures will change
over time. Also, costs and impact have been reported in the currency used in the original source report,
including Chinese Yuan, South Korean won and Dollars from Australia, Singapore, Hong Kong and
the USA. Where possible we have retained the original currency used to avoid inaccuracies caused by
fluctuating exchange rates.

Copyright
© 2019 The Economist Intelligence Unit Limited. All

rights reserved. Neither this publication nor any part
of it may be reproduced, stored in a retrieval system, or
transmitted in any form or by any means, electronic,
mechanical, photocopying, recording or otherwise,
without the prior permission of The Economist
Intelligence Unit Limited.
While every effort has been taken to verify the

accuracy of this information, The Economist
Intelligence Unit Ltd. cannot accept any
responsibility or liability for reliance by any person
on this report or any of the information, opinions
or conclusions set out in this report.
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Moving on from one

How can China manage its declining fertility?

About this report 2

China’s falling fertility rate  7

The policy response  11

How have other regions responded to falling fertility?  16

Evidence of effectiveness for policies from the wider literature 19

Discussion and recommendations 21

1 © The Economist Intelligence Unit Limited 2019

About this report

2 © The Economist Intelligence Unit Limited 2019

From 7.5 children per couple to just 1.6

Key drivers behind China’s falling fertility levels

The continued delay of first child births remains an issue

3 © The Economist Intelligence Unit Limited 2019

The growing role of assisted reproductive technologies

Conclusion and recommendations

4 © The Economist Intelligence Unit Limited 2019

5 © The Economist Intelligence Unit Limited 2019

purpose of giving birth and taking care of the

6 © The Economist Intelligence Unit Limited 2019

China’s falling fertility rate

From 7.5 children per couple to just 1.6

7 © The Economist Intelligence Unit Limited 2019

8 © The Economist Intelligence Unit Limited 2019

A woman’s work is never done

More schooling, leading to later marriages and fewer births

9 © The Economist Intelligence Unit Limited 2019

Urbanization and the floating population

10 © The Economist Intelligence Unit Limited 2019

The policy response

From a one-child policy to a two-child policy

The change to a second-child policy has only impacted a small demographic

11 © The Economist Intelligence Unit Limited 2019

Table 1 Maternity, Paternity and Parental Leave Policy

12 © The Economist Intelligence Unit Limited 2019

China’s tax system remains skewed towards individual taxation

ART centres are highly regulated, but quality is variable

15 © The Economist Intelligence Unit Limited 2019

How have other regions responded to falling

Family policy packages in Singapore

Baby bonus in Singapore

Child care services in Hong Kong and South Korea

Child care subsidies in Hong Kong and Australia

17 © The Economist Intelligence Unit Limited 2019

ART and ART policy in Australia and South Korea

18 © The Economist Intelligence Unit Limited 2019

Evidence of effectiveness for policies from

Impact of family-friendly policies

Working hours and parental leave

19 © The Economist Intelligence Unit Limited 2019

Assisted reproductive technology

20 © The Economist Intelligence Unit Limited 2019

Discussion and recommendations

21 © The Economist Intelligence Unit Limited 2019

1. Support local governments in their implementation of fertility policies and

22 © The Economist Intelligence Unit Limited 2019

3. Break down barriers to ART, as it can bring happiness to individual families

4. Remove current limitations on the number of children a family can have

23 © The Economist Intelligence Unit Limited 2019

About this report 2

China’s falling fertility rate 7

The policy response 11

How have other regions responded to falling fertility? 16

Evidence of effectiveness for policies from the wider literature 19

Discussion and recommendations 21