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Sell Your Childbearing Quota to Me, Please

Fu Weigang, VP, Shanghai Institute of Finance and Law
April 19, 2012
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The biggest advantage of a childbearing quota trading system is to enable people longing for more children to fulfill their dream decently, on the one hand, and on the other hand, it helps the quota sellers to earn a better life.

Suppose you already have one child, and are economically able to bring up two. But you are prohibited by the current policy to bear another. What will you do? The easiest way is to violate the family planning policy and bear more, of course. But you will have to pay high prices for your choice. You must pay the social cost of upbringing, in the first place. But this will not be all for you to pay. If you work in a government department or institutional unit, you will also risk being dismissed from your post.
 
What to do, then? More and more people are mulling to go abroad for more children, such as Hong Kong and the United States that follow the principle of the birth place. But this is not a practice for the majority of the people. First of all, it is too costly. Secondly, languages and conventions will be a problem on these foreign lands. Worst of all, some local governments in China have now come to count the children born by their citizens on foreign lands as the ‘second child.’ In other words, even if their children have got the nationality of a foreign country or region, these people still have to pay the social cost of upbringing when they come back.
 
Is there another way out? The childbearing market may now sink into a dilemma: those who can afford a second child are not allowed to, while those are allowed to would hate to have more than one child due to their poor family conditions. It was precisely for this reason that Li Xinghao, a deputy to the National People’s Congress, put forward a proposal during the legislature’s just concluded annual session, calling for transfer of childbearing rights as a solution to the dilemma.
 
Li believed that people with comparatively better economic conditions may buy quotas from people allowed by law to have a second child. Specifically, a national platform can be put up for people with childbearing rights to transfer their quotas, with harsher punishment to be meted out to those that bear children after transferring their quotas. As for specific operation of this platform, Li suggested its pairing up quota transferors and transferees by way of lucky draws, with full attention being paid to protection of the rights and obligations of both parties.   
 
This is a very interesting solution. Through quota transfer, those longing for a second child can get the quota to fulfill their dreams, while those holding quotas will be duly added. The moment Li Xinghao’s proposal came out in the media, however, criticism poured in from all sides. The leftists labeled it as naked discrimination, saying that the rich should not be allowed to buy quotas from the poor no matter how much money they have. The rightists, meanwhile, expressed their concern that the practice would give the government an even greater power. Some of my friends have pointed out in their microblog that ‘most obviously, the practice will give birth to a considerable batch of rent-seekers and set up a barrier blocking the ultimate repeal of the family planning policy. It will also give the government a greater room for manoeuvre.” 
 
From the bottom of my heart, I stand for the repeal of the family planning policy. But the goal is too distant to help in the present situation. Suppose the policy is repealed 10 years later. Will that benefit any who are coming to child-bearing age today? Women enjoy a very short childbearing age in their life. Also, they get married fairly late these days. They can by no means wait for the lift of the childbearing restriction 10 years later. From this viewpoint, I stand for Li’s proposal.
 
As a matter of fact, quota transfer has been a common practice in various other aspects of our social life today, such as the transfer of pollution-discharging rights, the transfer of carbon-emitting quotas, and the transfer of various types of certificates and licenses. Why is that? Let’s take the transfer of pollution-discharging rights for an analysis. In this practice, legitimate pollution-discharging rights are created through the market after finalization of the total quota for pollution discharge. These rights are allowed to be traded in the same way as commodities, facilitating the control and reducing the amount of total pollution discharge and leading to the goal of environment protection. Trading of pollution-discharge rights was also criticized when it was first conceived. By now, however, it has come to be hailed by all as a feasible solution and popularized by quite some countries and international organizations. 
 
If pollution-discharging rights can be transferred, childbearing quotas can also be transferred. Even so, I do disagree with Li Xinghao over his proposal in some aspects. Why? Li’s proposal has set up too many restrictions. As Li has proposed, only holders of childbearing quotas are qualified to transfer, and the quotas should be traded for basic insurance and minimum living allowances. Too many restrictions will create a bigger room for rent-seeking and extend the limits of government power. 
 
In my opinion, people should be allowed to trade not only their second-child quotas, but first-child ones as well. Moreover, the transferors will be paid either with basic insurances or in cash. What the government needs to do is to put up a trading platform to potential transferors to register their offers and transferees to make the purchases. The couples that have sold their quotas can also make buy-back deals via the platform once they want to have a child. 
 
Compared to the practice of punishing violating couples by levying social upbringing fees on them, the childbearing quota trading mechanism is most noticeably advantageous in that it allows people longing for more children to both fulfill their childbearing dreams more decently and help their trading partners earn a better life.
 
 
 
Fu Weigang is vice president of Shanghai Institute of Finance and Law, specializes in the study of property law, urbanization and government supervision.

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