Trip.com Group, China’s biggest online travel agency is reported to pay 50,000 Yuan ($6,897.69) to employees for each kid they have. This subsidy, the company said, will be effective from July 1, and would be applicable worldwide.
Source: Reuters
Trip.com to the Aid of Young Parents
With innumerable employees across the globe, the travel agency plans on paying a parental cash subsidy of 10,000 Yuan a year, for 5 years to each employee for every child they have. Considering the number of employees they have, Trip.com said that the project would cost a total of 1 Billion Yuan.
Co-founder and Executive Chairman of the Board, James Liang said that he wishes the government would provide subsidies to families with multiple kids. He believes that the company’s decision would encourage young people to have more than one kid.
Young people in China cite lower income, high childcare costs, high education costs, and gender inequality, among others as the obstacles in the path of having kids. Trip.com’s policy can effectively address the economic hurdles faced by young people willing to have children.
The company would provide this subsidy to all permanent members who have worked for them for at least 3 years, irrespective of their gender. Mr. Liang, who is himself a demographer has opined that the country should dedicate 2% of its GDP to encourage fertility.
Government walks back on One Child Policy
Source: Brookings
During its one-child nation days, from 1980 to 2015, China have been warned by demographers that its population would get old before they accumulate enough wealth. This would affect the country’s workforce as well as wealth as the government would have to spend more on their elderly citizens.
China saw its lowest birth rate last year, when it fell to 6.77 births per 1,000 people, compared to 7.52 births in 2021. The Chinese government has taken a drastic reverse policy of encouraging people to have multiple kids. In 2021, the government granted permission to people for having as many as 3 children, however, being mostly confined at home due to COVID, people were reluctant to have kids.
China is now the second-most populous nation, falling behind India, according to the UN. The shrinking birthrate pose serious implications for the Communist regime as decreasing the workforce would have adverse effects on economic growth, reduce tax revenue and increase expenditure on pensions for the rapidly aging population. A fall in the marriage rate amongst the younger generation is yet another factor leading to the same problem.
Trip.com, however, is not the first company to encourage fertility. In 2022, Beijing Dabeinong Technology, an agricultural company, announced that employees would be rewarded with a bonus of 90,000 Yuan on having a third child while 30,000 and 60,000 Yuan were to be paid for the first and second child respectively, as reported by the state media.
Similarly, QiaoYin City Management, recently stated that they would pay 100,000 Yuan to employees for giving birth to their third child. The company said that their decision was in line with the government’s aim to increase the birth rate as well as financially support the families of young people.
