Chinese tech group joins the battle on falling birth rate

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Chinese online travel agency Trip.com is preparing Rmb1bn ($140mn) in cash subsidies to encourage employees to have more babies, in one of the first instances of a local tech company working to turn around the country’s falling birth rate.

The travel group, which owns booking sites including Ctrip, Skyscanner and Qunar, said it would pay out Rmb10,000 in annual bonuses to staff for each new child until the age of five. 

China’s population fell last year for the first time in decades while its birth rate also declined sharply to the lowest point on record — 6.77 births for every 1,000 people, down from 10.41 in 2019.

The scale and speed of the country’s demographic decline threatens to outpace similar crises in other ageing nations such as Japan and Italy. A UN study published this spring said that India was due to overtake China as the world’s most populous country by mid-2023.

Trip.com co-founder and executive chair James Liang is also a demographer, and has for years pushed the government to rethink its population policies.

In a statement on Friday he said: “Through the introduction of this new childcare benefit, we aim to provide financial support that will encourage our employees to start or grow their families without compromising on their professional goals and achievements.”

The company said the subsidies would only be available to employees who had been with the company for at least three years.

The demographic crisis is increasingly rattling the ruling Communist party, which for more than three decades limited births under a strict one-child policy. But a rapidly ageing society and plunging birth rates now have officials rushing to increase births. 

President Xi Jinping last month told officials that growing the population was a “vital issue” and has rolled out a number of related policies. They have included dismantling the costly after-school education system, increasing benefits for parents, and making it harder to get divorced.

The addition of private sector buy-in could help the party’s efforts. While Trip.com has only 30,000 employees, the public announcement was received with great fanfare by Chinese state media on Friday, and could spur other companies to follow suit. 

“They could serve as an example,” said Li Chengdong, head of internet think-tank Haitun. But Li also noted that Ctrip was in a unique position, with its business booming following the lifting of zero-Covid restrictions. “They made a bunch of money in the first quarter,” he said.

The trend of Chinese companies awarding employees for having children is starting to accelerate. Sanitation group QiaoYin City Management in June said it would pay for diapers and infant formula for any newborns and give out Rmb100,000 bonuses to staff who had three children.

Liang is one of the few remaining Chinese tech bosses willing to publicly advocate on issues beyond business. Last year during the brutal lockdown of Shanghai, he publicly questioned the country’s zero-Covid strategy, triggering a temporary suspension of his Weibo social media account.

“The fall in China’s birth rate and ageing are even faster and more severe than in Japan,” he wrote on social media in January, warning that the population decline seen in 2022 “was just the starting point.”

He advocated implementing a number of policies to turn the situation around, but also noted that cash subsidies from the government would not be enough.