Will China Print $315B to Boost Fertility? NewsWire

NewsWire: 1/19/22

• A popular Chinese economist went viral for suggesting that the country should spend $314B yearly to boost its fertility rate. The recent policy changes and incentives, he argued (before being silenced), are not enough. (South China Morning Post)
• NH: We have written several NewsWires on how and why China is ramping up its pronatalist policies. These policies include everything from limiting abortions and vasectomies to allowing families to have three children. (See "China Limits Vasectomies" and "China Pins Its Future on a Three-Child Policy.") 
• But Ren Zeping, a well-known Chinese economist with over 3.5M Weibo followers, believes this isn’t enough. In an article posted on WeChat, Ren argues the government "needs to print" 2T yuan ($314B) “to encourage society to have 50 million more kids in 10 years.” He further argues the government should use the money to help “older women” become pregnant.
• Though Ren did not say exactly what this money would be spent on or over how many years, the Wall Street Journal inferred (no doubt correctly) that he meant spending this amount yearly over the next decade. And he probably meant spending it on various bounties and subsidies going to new mothers. This would amount to over $20K per new-born child, no doubt spread out over the child's first few years of life.
• That sounds like a sizeable price tag. But keep in mind: Ren wants to boost births by 50 million over the decade, which amounts to an increase of just over 40% in China's birth rate. From China's TFR of 1.3, his goal, in effect, is to increase its TFR to at least 1.8 every year starting in 2021. Given that such an abrupt turnaround defies common sense, we might imagine the extra 50 million in a growing TFR trend that starts at its current 1.3 and ramps up to (say) a replacement rate of (say) 2.1 by 2026 and after. No matter how we imagine it, the improvement Ren is suggesting would rank as the most successful natality reversal ever achieved by a super-low fertility country. So Ren was not highballing the cost. He understands it's not going to be cheap.
• The CCP did not take Ren's suggestion well. The Beijing News, a government-owned newspaper, published an op-ed arguing the proposal would lead to inflation. And his account on Weibo was suspended for "violating relevant rules and regulations.” He has not responded to journalists seeking to clarify his proposals.
• Apparently, the CCP believes that Ren is going too far, too fast. IMO, there is nothing at all far-fetched about the prospect of a massive government spending campaign to boost fertility. It's coming. But the government first needs to demonstrate that all of its feebler forms of pronatalism fail before it embarks down this path. The CCP has become very sensitive to criticism of its vast about-face in birth-control policies. It doesn't like to be reminded that it stuck with its old "one-child" approach far too long. And now it doesn't like to be told that it is reversing direction too slowly. No doubt the Party was especially stung by Ren's open criticism of the government's current measures.
• These days, it seems, the CCP is touchy about a lot of things. Any criticism of government policy is getting to be dangerous.
• I personally recall, 10 or 15 years ago, going to China and giving presentations that openly questioned the demographic assumptions underlying China's fertility and retirement policies. Our remarks were welcomed, and our recommendations were widely discussed both by academic social scientists and by government policy officials. I'm pretty certain anything we say would no longer be welcome today.