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Trip.com, a Chinese online travel agency, is implementing a unique strategy to address the country’s declining birth rate by offering cash subsidies worth Rmb1bn ($140mn) to its employees for having children.
The company, which owns popular booking sites such as Ctrip, Skyscanner, and Qunar, will grant Rmb10,000 in annual bonuses to employees for each new child until they reach the age of five.
In 2020, China experienced a population decline for the first time in decades, with the birth rate reaching a record low of 6.77 births per 1,000 people, down from 10.41 in 2019.
This decline in population poses a significant challenge for China, surpassing similar issues faced by aging nations like Japan and Italy. A United Nations study predicts that India will surpass China as the world’s most populous country by mid-2023.
James Liang, co-founder and executive chair of Trip.com, who is also a demographer, has long been advocating for the government to reconsider its population policies.
In a statement released on Friday, Liang stated, “Through the introduction of this new childcare benefit, we aim to provide financial support that will encourage our employees to start or expand their families while continuing to pursue their professional goals and achievements.”
However, the subsidies will only be available to employees who have been with the company for at least three years.
The declining birth rate and aging population have become a major concern for the ruling Communist party, which enforced a strict one-child policy for over three decades. Now, officials are urgently seeking to boost births to address these demographic challenges.
In a recent speech, President Xi Jinping emphasized the importance of population growth and implemented various policies to encourage it, such as dismantling expensive after-school education systems, increasing parental benefits, and making divorce more difficult.
The involvement of the private sector, as demonstrated by Trip.com, could amplify the party’s efforts. Although Trip.com has only 30,000 employees, the company’s public announcement has garnered significant attention from Chinese state media and may inspire other businesses to follow suit.
“They could serve as an example,” stated Li Chengdong, head of the internet think-tank Haitun. However, Li also noted that Trip.com has a unique advantage due to its booming business following the lifting of zero-Covid restrictions.
The trend of Chinese companies incentivizing employees to have children is gaining momentum. In June, sanitation group QiaoYin City Management announced that it would provide diapers and infant formula for newborns and reward employees with Rmb100,000 bonuses for having three children.
James Liang stands out as one of the few Chinese tech leaders willing to publicly advocate on issues beyond business matters. During the strict lockdown in Shanghai last year, he openly questioned China’s zero-Covid strategy, leading to a temporary suspension of his Weibo social media account.
“China’s birth rate decline and aging population are occurring at an even faster and more severe pace than in Japan,” he wrote on social media in January, warning that the population decline witnessed in 2022 was just the beginning. He proposed implementing various policies to reverse the situation but acknowledged that cash subsidies from the government would not be sufficient.
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