Recently, two academics from China’s universities proposed to tax all working adults under 40 to build a “reproduction fund”. The proposal aims at alleviating the costs of childbirth and raising fertility. When families give birth to the second child, they could withdraw money from the fund. However, those couples who don’t have the second child cannot withdraw any money until they are retired.

For decades, China has restrictively controlled the number of babies women could have. The one-child policy has been requiring families to have only a child. Those women who violate the policy will be forced to stop pregnancy and undergo sterilization operations by the country’s “family planning” offices. But decades later, the one-child policy has caused a looming demographic crisis that officials begin to realize that it could imperil economic growth and to be anxious for a baby boom.

The one-child policy was eased three years ago. But the damage to China’s population growth had been done and the fertility willingness could not be rebounded anymore. Now the country is dealing with a demographic time bomb, which features an increase in the number of elderly people and a falling birth rate.

As of 2017, people aged 60 and above accounted for about 16.2 percent of China’s population, compared to 7.4 percent in 1950, according to the UN Population Division. The global percentage of people over 60 sits at 12.7 percent. Also, according to the State Council, the population is graying quickly. about a quarter of China’s population will be 60 or older by 2030, up from 13.3 percent in the 2010 census.

The increasing number of aging population means more retirement pension should be provided for the increasing number of retirees. However, China faces a widening shortfall of the financial support. In 2017, China’s pension funds collected 3.3 trillion yuan ($515 billion) and handed out 2.9 trillion yuan in payments. According to Reuters, thirteen pension funds in regions and administrative units around China can only cover less than one year’s worth of pensions.

Moreover, ending China’s decades-old one-child policy has not raised birth rates as high living costs deter larger families. As Bloomberg notes, “High living costs, long work hours and surging child-care expenses mean that many couples feel that they can only afford to have one child — or none.” Although the number of births in China did welcome a rise of nearly 8 percent in 2016 after the government eased one-child policy and allowed a two-child policy in 2015, the rise did not last long and the number of births then fell 3.5 percent in 2017, from 18.5 million in 2016 to 17.2 million.

This does not bode well for China’s economic growth. During the past four decades, China has enjoyed its demographic dividend to boost the economy. With one-child policy, China artificially adjusted its demographic structure to a good one with the ratio of those too old or too young to work to the working-age population dropping below 50 percent. But these days are over. Now, China is still finding a way to regain demographic dividend with its population anxiety.