Inside Out | Why John Lee’s baby bonus is fool’s gold for Hong Kong

Chief Executive John Lee Ka-chiu prides himself in being “result-oriented”, and the 171-point development blueprint elaborated in last week’s policy address provides a massive list of initiatives on which results will be expected. One initiative in particular should be quick and easy to measure: his one-off, HK$20,000 (US$2,500) cash handout for every child born between now and October 2026.

But behind the clear commitment to child-bearing mothers, questions arise over his government’s strategic aim and whether a HK$20,000 handout is in any credible way the best way of achieving it. I presume Lee’s strategic intent is to reverse long-standing demographic change.

In our rapidly ageing society, he fears the challenging burden that will be borne by a shrinking working-age population and hopes we can persuade women to have babies in much larger numbers. For example, the year to mid-2023 saw just 32,600 babies born in Hong Kong but more than 54,000 deaths. Our population is shrinking even as the cost of supporting our retired elderly is rising sharply.

But Lee is misdescribing our problem and prescribing an inappropriate and ineffective solution. First, Hong Kong’s population problem has never been – and will never be – driven by birth rates.