Commentary: China’s Demographic Crisis Requires a Radical Solution — Pay Parents a Salary

1. [para. 1] On International Workers’ Day, the author urges rethinking labor definitions, emphasizing two essential types: material goods production and child-rearing. Modern economies excel at the first but fail at the second, risking societal decline without new generations.

2. [para. 2] China exemplifies this: materially prosperous with 2025 grain production at 1.43 trillion jin exceeding food security thresholds, the only nation with all UN industrial categories, and retail sales over 50 trillion yuan ($7.32 trillion) last year.

3. [para. 3] Despite abundance, China faces a demographic crisis: 2025 births hit a record low of 7.92 million, fertility rate ~1.0 (below half replacement level), population aged 60+ at 23%, and working-age group shrank by 6.62 million in one year, slowing tech and growth.

4. [para. 4] Root cause is market failure: parents bear high child-rearing costs (financial, time, opportunity), especially women facing career penalties like lost promotions and wage stagnation post-maternity leave.

5. [para. 5] Society and state reap benefits: children become workers, consumers, innovators, taxpayers funding economy and pensions, leading to free-riding that discourages family formation.

6. [para. 6] AI era worsens it by automating production, elevating human innovation needs; parents must invest more in education/skills, heightening costs while society gains wealth/leisure, leaving parents time/money-poor.

7. [para. 7] Solution: redefine parenting as skilled profession building human capital infrastructure; treat it as a job with salaries for parents.

8. [para. 8] Beijing acknowledges via 15th Five-Year Plan prioritizing people investments; July 2025 State Council subsidy of 3,600 yuan/year per child under three is a start but insufficient.

9. [para. 9] Propose parental salary: 1,000 yuan/month first child, 2,000 second, 3,000 third+, until age 18, plus universal childcare and tax deductions to cut financial barriers.

10. [para. 10] Affordability via reallocating from high 40.6-41.8% investment rate (vs. global 23-27%) away from redundant infrastructure, or long-term sovereign bonds for childcare fund.

11. [para. 11] Short-term: boosts consumption, stimulates child economy/demand. Long-term: stabilizes births, preserves innovation/national strength.

12. [para. 12] Human investment is core economic imperative; compensating parents ensures civilization's prosperity/continuity.

13. [para. 13] Author: Liang Jianzhang, Trip.com Group executive chairman, Peking University economics professor.

14. [para. 14] Views are author's, not necessarily Caixin's.

(Word count: 498)