China has a birth-rate problem. It's also the 2nd-least affordable country in the world to raise a child, says a Beijing think tank.
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- China is one of the world's most unaffordable places to raise a child, a Beijing think tank says.
- The cost of raising a child compared to GDP per capita is 6.3 times in China, but 4.11 in the US, it said.
- The cost of raising a child is sinking China's already falling birth rate, the researchers said.
China is one of the most unaffordable places in the world to raise a child, ranking higher than the US, Japan, and the UK, per a new report from a Beijing think tank.
Raising a child to 18 years of age costs Chinese families an average of 6.3 times China's GDP per capita, per Yuwa Population Research's "China Childbirth Cost Report 2024," released on Wednesday. That's compared to a factor of 4.11 in the US.
The report comes amid rising concerns about a declining birth rate in China, which fueled its growth with a booming population for decades.
"The fundamental reason why China has almost the lowest fertility rate in the world is that it has almost the highest fertility cost in the world," researchers Liang Jianzhang, Huang Wenzheng, and He Yafu wrote in Yuwa's report.
The think tank said it calculated child-raising costs in China using 2023 data from the National Bureau of Statistics. Its rating for the US was derived from the Department of Agriculture's latest report on parent spending, "2015 Expenditures on Children by Families."
South Korea is the only country that's less affordable for child-rearing than China, Yuwa's report found. There, it costs 7.79 times the GDP per capita to raise a child to age 18. The report used data from Korea's Ministry of Health and Welfare released in 2013.
Using official statistics and research reports, the think tank said it costs UK families an average of 5.25 times the local GDP per capita to raise a child to 18, while in Japan, that ratio is 4.26.
Yuwa broke down the cost of raising children in China through recurring expenses such as education, childcare fees, food, clothing, medical care, and entertainment, as well as short-term expenditures like pregnancy costs and hospital care for mothers and newborns.
In total, raising a child until they are 18 costs Chinese families an average of 538,312 yuan, or about $73,000, Yuwa said. Urban families, on average, spend 666,699 yuan, or about $93,000, while rural families spend 364,868 yuan, or about $51,000.
Chinese middle-class families in the 40th to 60th percentile income bracket spend around 446,582 yuan per child, or $62,082.
Still, raising a child in the US costs far more without considering income disparities. Middle-income families in the US are projected to spend $233,610 raising a child until they are 18, per the USDA. A Business Insider report from January put the estimate of raising a child significantly higher, at an average of $462,852.
What makes it difficult to raise a child in China?
Lower birth rates could be driving up China's per-child costs. Yuwa noted a report from the USDA that found married couples with one child spend about 27% more on per-child expenses than couples with two children.
"That is, with each additional child, expenses on each declines," the USDA report said. For example, families can reuse toys and crawling mats for multiple children.
China's birth rate is about half the national birth rate in the US and is falling. Urban families there typically only raise one or two children, even after its one- and two-child policies were removed.
Housing is another major cost factor, with major urban hubs seeing much lower fertility rates, the report said. Shanghai and Beijing are China's most expensive cities to raise children in, costing 1,010,130 yuan and 936,375 yuan respectively, per child, or $140,000 and $130,000, per Yuwa.
Chinese women are also disproportionally affected when they raise children, the researchers said.
"Research shows that raising children leads to a reduction in women's paid work hours, mostly before the child is 4 years old," their report said. "But Chinese men's paid work hours do not change significantly after becoming fathers."
Having a child also leads to a 12% to 17% decline in women's wage rates in China, the researchers said.
Yuwa projected that China could nearly double its birth rate by providing cash and housing subsidies, building childcare facilities, revamping the education system to include fewer exams, and reforming workplace practices for parents.
Notably, the average cost of raising a child in China fell slightly compared to Yuwa's 2022 report on the same topic. The think tank said data from 2019 showed that the average cost was $76,000, or about seven times the country's GDP per capita at the time.