- China is identified as one of the world’s most expensive places to raise a child, according to a Beijing think tank.
- The cost of raising a child in China is estimated to be 6.3 times the country’s GDP per capita.
- In comparison, the cost-to-GDP ratio for raising a child in the United States is lower, standing at 4.11.
- The high cost of child-rearing in China is seen as a contributing factor to the country’s declining birth rate.
- Researchers warn that the financial burden of raising children may dissuade couples from having children or lead them to have fewer children than desired.
- This trend exacerbates China’s demographic challenges, including an aging population and a shrinking workforce.
- The think tank emphasizes that the rising cost of raising children could further compound the downward trend in birth rates, posing significant challenges for China’s future social and economic development.
According to the report by Yuwa Population Research, South Korea emerged as the only country deemed less affordable than China for raising children, with a rating of 7.79 based on data from its Ministry of Health and Welfare. The analysis compared the financial burden of child-rearing across various countries, revealing that UK families face a cost equivalent to 5.25 times the local GDP per capita, while in Japan, this ratio stands at 4.26.
Yuwa’s assessment of child-raising expenses in China encompassed a wide range of factors, including recurring costs such as education, childcare fees, food, clothing, medical care, and entertainment. Additionally, short-term expenditures like pregnancy costs and hospital care for mothers and newborns were considered in the analysis.
Overall, the report estimates that raising a child until the age of 18 imposes a substantial financial burden on Chinese families, averaging 538,312 yuan, approximately $73,000. Urban families bear a higher cost, spending an average of 666,699 yuan, equivalent to about $93,000, while rural families face a comparatively lower expenditure of 364,868 yuan, approximately $51,000.
For Chinese middle-class families falling within the 40th to 60th percentile income bracket, the average expenditure per child amounts to approximately 446,582 yuan, equivalent to $62,082. However, when compared to the United States, the cost of raising a child is significantly higher, even without factoring in income disparities. Middle-income families in the US are estimated to incur expenses totaling $233,610 for each child until they reach the age of 18, according to data from the US Department of Agriculture (USDA).
Why Is Raising a Child in China Such a Challenge?
Lower birth rates may be contributing to the rising per-child costs in China, according to findings from Yuwa. Data from the US Department of Agriculture suggests that married couples with only one child tend to spend approximately 27% more on per-child expenses compared to couples with two children. This phenomenon is attributed to the fact that additional children allow for cost-saving measures such as reusing toys and other items across siblings. Despite the removal of China’s one- and two-child policies, urban families in China typically opt to have one or two children, resulting in a lower birth rate compared to the US.
Housing expenses also play a significant role in driving up the cost of raising children, particularly in major urban centers like Shanghai and Beijing. According to Yuwa’s report, these cities are among the most expensive in China for child-rearing, with costs per child amounting to 1,010,130 yuan and 936,375 yuan, respectively, equivalent to approximately $140,000 and $130,000.
Furthermore, the burden of childcare disproportionately falls on Chinese women, leading to a reduction in their paid work hours, particularly during the first few years of a child’s life. Conversely, men’s paid work hours remain relatively unchanged after becoming fathers. Additionally, women experience a notable decline in wage rates following childbirth, ranging from 12 to 17%, as highlighted by the researchers.
To address these challenges and potentially increase the birth rate, Yuwa recommends that Chinese authorities draw lessons from other countries’ experiences in reducing childcare costs. Suggestions include providing cash and housing subsidies, expanding childcare facilities, reforming the education system to reduce emphasis on exams, and implementing workplace reforms to support working parents.
Interestingly, Yuwa’s report indicates a slight decrease in the average cost of raising a child in China compared to previous years. Data from 2019 showed that the average cost was $76,000, approximately seven times the country’s GDP per capita at the time.