Chinese Balk at Child-Rearing Costs

Nov 16, 2013

Chinese Balk at Child-Rearing Costs

An easing of the one-child policy might help China address a coming slump in its work force. But the country’s citizens are concerned with another reality: how expensive it has become to raise even one kid. In a country where the cost of living has soared alongside breakneck economic growth, some Chinese are saying that due to economic pressures, they don’t want a second child even if the government allows them to.Beijing’s announcement Friday that couples will be able to have two children if one spouse is an only child was, for the most part, a welcome surprise. A survey on SinaCorp.SINA -0.30%’s Weibo, China’s equivalent of TwitterTWTR -1.59%, showed the majority of nearly 26,000 users who responded the next day would have another child under the new rule.  Their reasons ranged from being able to ease the burden on one child having to take care of retired parents to ensuring that the kids won’t be lonely growing up.

Yet roughly 37% still said they would opt out of having another child.

It’s “unaffordable,” wrote one Weibo user. “A semester of kindergarten alone costs almost 10,000 yuan.”

One can’t afford to “give birth, raise them, educate them, house them, foot their medical costs…” wrote another user.

The Weibo comments address what many see as the cost of raising a child right. While foreign formula makers have been under a cloud in China lately, more consumers areskeptical of domestic producers in the light of a 2008 tainted dairy scandal. Many parents also believe private schools are preferable to Chinese schools that teach students to pass China’s national gaokao tests, and nothing else.

Apart from a chance to point out the economic burdens Chinese parents face, the one-child policy loosening also became an opportunity to point out how antiquated the rules remain.

“If both sides are only children, can the couple have four kids?!” wrote one female useron Weibo.

“Be Careful – once our generation gives birth to two kids, our kids won’t be able to do the same because they won’t be only children,” wrote a user from Beijing, addressing the unanswered question of how many children future generations will be allowed to have. Friday’s announcement doesn’t indicate when further loosening might come.

A few users noted that the new policy will shift the dynamics of finding a mate. “I’m not an only child, so if I want to have two children, I have to find a boyfriend who is an only child,” wrote one woman from Henan province.

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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