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Wednesday, September 4, 2013

The Chinese Government Makes Money Off the One Child Policy

Even though China is going over a demographic abyss, the Chinese government has refused to eliminate the one-child policy. This may be part of the reason. From the Atlantic:
When debating China’s one-child policy, China’s domestic media and observers overseas mostly focus on its impact on the population structure or incidences of inhumanity involved in the implementation of the policy (such as forced abortion). Almost unmentioned is the fact that the government is profiting fiscally from the policy by collecting so-called “social support fees.” 
... In 2002, the State Council gave it an official definition: a fee paid by citizens giving birth extra-legally, in order to compensate for the government’s public goods spending, adjust the consumption of natural resources, and protect the environment. ...
After reviewing some conservative estimates as to the amount of the fee collected (apparently, the fee varies from location to location, and is often determined on a case-by-case basis), the article concludes:
... Even though the social support fee is important for local government bodies, it is the family planning officials, who are responsible for collecting the fee, who are the biggest beneficiaries. According to a regulation issued by the State Council, the spending of the fee should be determined by treasury organs, in isolation from the system of fee collection. Yet, as reported by the China Broadcasting Network, in many places, the treasury bureaus return much of the levied revenues to the family planning organizations upon receiving the fees. Some authorities even allow whoever collects the fee to keep part of it as personal income. Therefore, family planning organs and their personnel are greatly incentivized to collect the fees. Authorities in some regions even allow the extra births because their incomes depend on them. 
Within this context, it is easier to understand why, despite strong public objection to the policy and academic proof of the policy’s long-term harm on China’s demographic structure, the strict birth control policy has remained resistant to reform. Softening the one-child policy means forcing the government itself to forgo its vested interests and finding a sustainable solution to the crisis of “hand-to-mouth finance.” Reforms must always be accompanied by resolutions to conflicts of interest and material compromises, and the impasse on China’s family planning policy is apparently not an exception.

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