Hong Kong’s approach to population policy has come a long way in half a century. In the 1970s, when the population was growing rapidly, the government and the Family Planning Association famously encouraged couples to have no more than two children. “Two is enough” became one of the most memorable public service campaigns of its time.

Today, the concern is the opposite. Hong Kong is facing a persistently low birth rate, a rapidly aging population and the prospect of a shrinking working-age population. The special administrative region government has responded with a range of measures, including tax concessions, housing priority for families, childcare support and the extension of newborn incentives. These are sensible steps, indicating the authority understands that reversing the demographic trend requires more than a single policy intervention.

But there is a larger question that deserves attention. Is Hong Kong’s fertility problem really about the cost of having children, or is it increasingly about the kind of future young people believe they can offer them? The distinction matters.

Hong Kong recorded fewer than 30,000 births from mid-2025 to mid-2026, roughly half the level of a decade ago. The previous newborn incentive, a one-off payment of HK$20,000 ($2,548), was taken up by tens of thousands of families, yet the decline in births continued. This does not mean financial assistance has no value. Raising a child in Hong Kong is expensive, and every form of support can make a difference. But having a child is a commitment that extends far beyond the first year. It involves housing, childcare, education, time and career decisions over years. Subsidies can ease the burden. It cannot, by itself, remove the uncertainty surrounding it.

Recent research from Tokyo offers an interesting comparison. A survey of around 10,000 people aged 18 to 49 found that among married people without children, the most commonly cited obstacle to having a first child was the cost of care and education. However, among parents who already had children but planned to have fewer than their ideal number, another set of concerns became much more prominent. The psychological, physical and time demands of raising children were increasingly difficult to absorb.

This is highly relevant to Hong Kong. For a couple considering their first child, the question may be whether they can afford it. Once they already have one child, the question becomes whether their careers, schedules, energy and family life can accommodate another. The financial calculation remains important, but it is no longer the whole calculation.

Hong Kong’s working culture makes this particularly difficult. The city relies heavily on dual-income households, while working hours can be long and childcare support, although improving, remains a challenge for many families. A young couple may be able to manage the financial cost of a child and still feel that they cannot realistically manage the demands of raising one.

Then there is education. Hong Kong has developed an extraordinarily competitive education culture, with pressure beginning remarkably early. Kindergarten applications can be followed by tutoring, extracurricular activities, examinations and endless search for educational advantages. Many parents are not simply thinking about whether they can raise a child. They are thinking about whether they can give that child enough opportunities to succeed. That creates another, less visible barrier to parenthood. Some couples may decide not that they do not want children, but that they do not want to expose a child to the pressure they themselves have experienced. Others worry that they will not be able to provide what society increasingly regards as the “right” childhood.

There is now another source of uncertainty that previous generations did not have to confront to the same extent: artificial intelligence. AI is transforming the labor market at extraordinary speed. Entry-level administrative roles, customer service positions and parts of professional services are already being reshaped by automation and generative AI. It’s impossible to know exactly which jobs will disappear, which will be created and how careers will evolve over the next decade. For young adults who are deciding whether to start a family, that uncertainty is significant. If they are unsure about their own career prospects, they naturally hesitate before taking on a responsibility that could last 20 years or more.

This is why fertility policy cannot really be separated from employment policy, education policy, housing policy or the broader question of quality of life.

Tokyo provides another useful lesson. The Japanese capital remains highly successful at attracting young people for education and employment. Yet between 2019 and 2023, Tokyo recorded strong net inflows among Japanese people aged 20 to 29, while the 30 to 39 age group and children aged up to nine recorded net outflows. Part of this movement reflects families choosing to live outside the Japanese capital, where housing is more spacious and family life can be more manageable. The lesson for Hong Kong is not that successful cities inevitably lose families. Rather, a city that is highly attractive to a young professional may not necessarily remain equally attractive once that professional becomes a parent.

This is an important distinction as Hong Kong seeks to attract and retain talent. The city still has considerable strengths. It offers an international business environment, sophisticated professional services, a relatively simple tax system, excellent connectivity and a unique position linking the Chinese mainland with global markets. The Northern Metropolis and the development of new-tech industries could create opportunities for younger generations. Yet people do not experience a city only through its economy. They experience it through the practical realities of everyday life.

Can parents leave work at a reasonable hour? Can they find reliable and affordable childcare? Can they afford a home with enough space for a growing family? Can their children receive a good education without parents feeling compelled to join an exhausting competition from an early age? These may not traditionally be regarded as fertility policies, but they are closely connected to the decision to have children.

The government has moved beyond the idea of a single cash incentive, using a broader combination of tax, housing and childcare measures. That’s a constructive direction. The next step is to consider how employers and society can also contribute to creating a more family-friendly environment. This could involve encouraging greater workplace flexibility, expanding childcare provision, incentivizing employers that genuinely support working parents, and continuing efforts to reduce unnecessary educational pressure. It also means acknowledging that the arrival of AI is creating a new layer of career anxiety for young people and that demographic policy cannot be designed separately from the future of work.

Hong Kong does not need to enter a bidding war with Singapore or other cities over who can offer the largest incentive for a newborn. Nor can government policy remove every difficulty associated with raising a family. What it can do is make the overall environment more supportive.

Ultimately, the decision to have a child is not made by calculating the value of a government allowance. It’s made by imagining the next 10, 20 or 30 years and deciding whether the future looks sufficiently secure, manageable and hopeful.

Hong Kong has started to recognize that reversing its fertility decline requires more than a cheque. The bigger challenge now is to build a city in which young people can see a bright future for themselves, their careers and their families, and believe that having children is a future worth choosing.

The author is chairman of the Asia MarTech Society and sits on the advisory boards of several professional organizations, including two universities.

The views do not necessarily reflect those of China Daily.