China’s population crisis can be solved only by printing trillions of yuan to boost birth rate, prominent economist claims
- Controversial comments by Ren Zeping suggest that US$314 billion would help add 50 million kids over a decade, in part by relying on older Chinese women to give birth
- But demographers and state media throw cold water on Ren’s idea, warning of inflation risks and pointing to failed attempts in other countries
One of China’s most high-profile economists says the central bank should print 2 trillion yuan (US$314 billion) to help boost low fertility rates – a controversial suggestion that has sparked widespread discussion.
“The central bank [should] print an extra 2 trillion yuan to encourage society to have 50 million more kids in 10 years,” Ren said, adding that the money would be roughly 2 to 3 per cent of the country’s gross domestic product (GDP).
“This can solve China’s low-birth and ageing-population problems and energise the future without burdening people, companies and local governments. Based on our studies, this is the only, and the most practical, solution.”
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He also urged China to establish the fund as quickly as possible, so older women who remain fertile can take advantage of it.
In 2020, China’s births fell by 18 per cent from 2019, marking a near six-decade low. Some regions recorded births falling by more than 10 per cent.
Central and local governments have rolled out a raft of policy changes and financial support measures to encourage Chinese couples to procreate, yet public sentiment often points to the fact that children are a costly and taxing addition for most families.
Ren said that mild and general policies are ineffective, and that robust measures must be implemented to address the falling birth rate.
“In the past, we printed money to stimulate real estate and were left with high property prices,” he said. “If we print money to encourage childbirth, we will be left with a batch of young people.”
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Despite an outpouring of criticism from the public and analysts, some of whom suggested that Ren’s ideas were impractical and lacked common sense, he doubled down on them during a live-stream broadcast on Monday evening. Encouraging births by printing money will become the reality in the next years, he argued.
Chinese demographer Liang Jianzhang had suggested a day earlier that the government should allocate 5 trillion yuan – nearly 5 per cent of the country’s GDP – for encouraging childbirth, housing stipends and childcare facilities.
Unlike with Ren’s money-printing option, Liang suggested that the 5 trillion yuan come from the fiscal budget.
Economists and analysts pounced on Ren’s comments with their own critical assessments.
The Beijing News published an op-ed arguing that Ren’s money-printing strategy was a far cry from basic economic principles and would lead to inflation, thus further driving up the cost of raising children.
It’s medically ignorant to count on 40- and 50-year-old women to ramp up birth rates
Hong Hao, chief strategist at Bank of Communications, pointed to the United States and Japan in refuting the impact that printing money has on birth rates.
“Examples from abroad have proved that printing money has nothing to do with birth rates, and setting up a special fund would be useless,” Hong said. “In the industrialised age, population growth is of least concern because you can’t turn the tide.”
Yi Fuxian, a demographer and senior scientist at the University of Wisconsin-Madison, also noted how it is increasingly difficult for women to have children as they get older. Between 56 and 65 per cent of births in China are by women aged 20-29, he said.
“It’s medically ignorant to count on 40- and 50-year-old women to ramp up birth rates,” Yi said.
