Hong Kong’s low birthrate problem cannot be simply solved by handing out HK$20,000 per child

Over the past few decades, Hong Kong has been facing a significant decline in birth rates because of a multitude of factors: high cost of living, limited living space, the fast-paced and competitive nature of Hong Kong’s society, high levels of stress, and more recent developments such as political and social instability and COVID-19.

HK$20,000 per newborn: a solution for Hong Kong’s population problems?

The number of total births has been gradually declining since 2016, and has even been surpassed by the total number of deaths at some point between 2019 and 2020, meaning that there’s now negative population growth in Hong Kong.

Total number of births and deaths in Hong Kong since 2012. Data source: GovHK. Graph credit: Yian Chen

This decline, alongside Hong Kong’s problem of having an ageing society, could potentially cause issues for Hong Kong’s labour force.

By the end of the next decade, a third of the city’s population is expected to be aged 65 and above. Hong Kong’s labour force has downsized by 6 per cent between 2018 and 2022, a shrinkage that has “inevitably resulted in significant manpower shortage,” according to a Legislative Council document.

On October 25, 2023, Hong Kong’s Chief Executive John Lee announced in a policy address that Hong Kong will offer a one-off HK$20,000 bonus for each baby born on or after October 25 to a parent who is a Hong Kong permanent resident. The rationale is incentivise them to have children amid the city’s declining birth rate.

John Lee speaking to the media after his policy address on October 25, 2023. Photo credit: GovHK

However, the policy has not received too warm of a response since its announcement.

A ridiculously low bonus

Mary Choi has been married to her husband for 8 years, yet the couple has not opted to have any children.

On a social media thread discussing this newest Hong Kong policy address, she wrote: “It’s like giving you a ten-dollar discount coupon for buying a Lamborghini.”

Upon further interview, she disclosed in detail some of the concerns she and her husband have about raising a child in Hong Kong.

“Money is definitely an issue,” said the 36-year-old, “It costs at least 3 million Hong Kong dollars to bring up a child, and that’s only providing for it basic survival necessities. If you want your child to have a good education, and provide them with the opportunity to learn life skills at an early age, it would cost double, or even triple times the money.”

She said that with aging parents that need her support, and a barely medium-level paying job, it’s almost unthinkable for her and her husband.

When asked if she thinks the HK$20,000 bonus would convince some couples into considering having children, she said she thinks it is “highly unlikely.”

“A friend of mine got pregnant a couple of months back. And barely eight months in, she has already spent more than HK$20,000 on pre-natal check-ups, maternity clothes, and other supplies necessary, such as a stroller,” Choi laments.

According to the Hong Kong census and statistics department, the average monthly income of a person working in Hong Kong is HK$19,100, as of May, 2022. This would mean that the bonus would barely cover a month’s income for one person.

“It’s not just about money.”

As it turns out, money is not the only issue Hong Kong people are concerned with in terms of raising children.

Jasmine Lee works as a lawyer in an international law firm. According to her, she has quite a well-paying job and is “not concerned with the financial costs of raising children.”

But she also said: “For me and my husband, as well as for quite some Hong Kong people, money problems is not the sole reason why we don’t want to have children. It’s the high pressure we face in society that makes us hesitate to bring a new life into this world.”

She described her routine life, where she would spend long hours at work, return home extremely tired both physically and emotionally, and still have social networking needs after work, along with some occasional overtime working in the middle of the night because of clients from totally different time zones.

“It’s just impossible to think of having a kid with all this. Children take up too much time and energy. At the moment, I have to prioritize my job, or I would end up losing good opportunities in such a competitive market as Hong Kong,” said Lee.

“Colossal financial burden”

In face of the low reaction towards the new policy, Shiu Ka-fai, chair of the Hong Kong Liberal Party, asked in the Legislation Council (Legco) on November 8, 2023 if authorities would consider disbursing an annual cash bonus of HK$40,000 to low-income parents with babies, until the child reaches the age of five or six.

Deputy Chief Secretary Warner Cheuk Wing-hing responded to the suggestion by indicating that the proposal would mean that each baby would receive HK$200,000 to HK$240,000, which would cost the government up to HK$65 billion according to preliminary estimates, calling it a “colossal financial burden” and not a good use of resources.

Featured Image: GovHK

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