Trip.com Group, the largest online travel company in the world, looks to address China’s population decline and aging demographic by offering cash incentives to employees to have kids.
Recognizing the need for a supportive working environment and the challenges posed by the population decline, the company has introduced a childcare subsidy program for its employees.
Under this program, employees who have been with the company for three years or more will receive an annual cash bonus of $1380 (RMB 10,000) for each newborn child from the child’s first birthday until the age of five.
This initiative, with a budget of $138 million (RMB 1 billion), aims to support employees in their family planning journey while promoting a healthy work-life balance.
The shift in perspective reflected by Trip.com Group signifies a broader awareness in China regarding the demographic imbalances and future challenges.
During the Skift Megatrends event in New York City in January, Skift had highlighted the significant implications for the travel industry as India surpasses an aging China as the world’s most populous country this year.
James Liang, the executive chairman of the Board of Trip.com Group and a prominent demographer in China, emphasized the importance of this childcare benefit in empowering employees to pursue both their professional ambitions and their aspirations of starting or expanding their families.
After years of advocating its one-child policy, China now grapples with the significant challenge of population decline and an aging population.
Demographers, including Liang, express concerns about the imbalance between an increasingly aged population and a diminishing number of young people, which could potentially disadvantage China in international competition.
Government projections estimate that by 2035, 30% of China’s population, or 400 million people, will be age 60 and over.
In 2019, 254 million people in China were aged 60 years or older.
In January, China’s National Bureau of Statistics indicated that the country’s population stood at 1.4 billion at the end of 2022, marking a decrease of 850,000 from the previous year.
The decline in China’s population, the first in nearly 61 years, has become a reality. The burden of supporting an expanding elderly population falls on a diminishing number of young people, raising pressing concerns about elderly care, Liang noted in a blog post earlier this year.
Moreover, a decline in the young population can hinder economic innovation and lead to a decline in entrepreneurial activities and creativity, similar to Japan’s experience, he said.
Furthermore, a shrinking young population can impede economic innovation, entrepreneurial activities, and creativity, as seen in Japan’s experience.
Various regions in China have introduced initiatives and incentives to address the population decline. These include cash rewards, extended leave, loans, tax breaks, housing subsidies, and increased paid marriage leave days.
Da Bei Nong Group, an agricultural technology company in Beijing, had announced cash rewards and extended leave for expecting parents.
While these measures aim to encourage childbirth and alleviate financial burdens, Liang emphasizes the need for long-term strategies and more comprehensive measures.
Cash subsidies alone may not be sufficient to encourage childbirth, he wrote, adding that to address the population decline effectively, reducing the costs associated with raising children, such as tax exemptions, subsidized mortgages, and affordable childcare and education, is crucial.
Additionally, overhauling the education system and reducing academic competition pressure can foster a greater willingness among young couples to have children, noted Liang.
Tags: asia monthly, china, online travel newsletter, trip.com