The law ended arbitrary monetary penalties by obligating couples giving birth to more than one child to pay "social support compensation" for the added strain it placed on social and public resources.

"Living in a market economy dampens the desire of many couples to have more than one child, or any at all. But it has the opposite effect on more affluent families," says demographer Wang Feng. Sources of Social Support Compensations have received evidence on the binding effects of family planning policy on low- and medium-income earners. And the obligation to pay compensation provides a legal basis on which high income earners are allowed more children than standard wage earners. Public attention polarizes on the financial lengths to which wealthy, often public, figures go to skirt the one-child stipulation – far more so than it ever did on illegal rural births. This is attributable to media revelations of the vast sums of social support compensation celebrities and public figures have paid for the privilege of a larger family.

Demographer Li Weixiong maintains that a higher birth rate among the affluent minority has little impact on the population control program. More problematic is the effect of their actions, which violate the principles of justice and fairness for all, on their status as public role models.

Between 2002 and 2005 there were 84 cases of second births to the rich of Shanghai, accounting for 7.17 percent of the municipal total, and 12 in Dalian, according to figures released by local family planning commissions. Many high-income earners expect to have two or more children, preferably sons, partly because single children are observed to be less socially able when they become adults than those with siblings, and partly to create more than one inheritor of family property. The desire for more children motivates affluent couples to go abroad to give birth, divorce and remarry, or simply pay enormous social compensation.

The amounts of compensation payable vary from place to place. Couples in Beijing exceeding their prescribed limit of births pay compensation of three-to-eight times the annual municipal per capita income. Those in Hunan are liable for two-to-six times their annual income. Compensation of six-to-eight times the per capita income applies to bigamous and illegitimate births. Notable payouts include RMB 1.3 million to Hunan Province and three cases in Wenzhou in August 2008 each in excess of RMB 1 million.

Local population and family planning commissions are formulating stricter compensation criteria for high-income earners. Deng Xingzhou, director of the Beijing Municipal Population and Family Planning Commission, recently disclosed coming revisions to the law based on Social Support Compensation payable by the more moneyed sector being calculated using a scale different from that applicable to the broad masses.

Certain scholars are in favor of a higher rate of compensation being levied on the wealthy. They argue that greater-than-average wealth constitutes entitlement to more than one child, and that the decision in such cases is based on consumption rather than old-age insurance. And as higher Social Support Compensations levied on the rich facilitate long-term "redistribution of social wealth," they help promote social progress.

Others doubt the scheme's legitimacy. Qiao Xiaochun from the Peking University Demography Research Institute believes that such blatant bias within local policy invites recurrence in rural areas of arbitrary "punitive penalties." Another argument is that all people, rich or poor, should be subject to common criteria on matters of procreation. Also that discriminative rulings fuel social resentment and constitute a penalty for being wealthy. Li Ruojian, director of the Sun Yat-sen University Population and Development Research Institute, maintains that opportunistic regulations harm the country's population control program by opening a legal loophole that allows couples able to afford the applicable social support compensation to have as many children as they like.

Public attention also focuses on government workers who trade on their official status to qualify for more than one child. Many people insist that violating officials be subjected to fines over and above the standard amount of compensation payable. There are reports of officials who have abused their power in this way losing their official posts and sometimes CPC membership, and in certain localities being dropped from their government positions within three years of the offence.

Birth Control Incentive

China's population policy promotes birth control by offering old-age care, social security, basic medical insurance and maternity insurance to couples that practice family planning. The Chinese government brought an aid program into effect in 2004 that pays each of the rural couples who have one child or two girls an annual subsidy of RMB 600 until death. As demographer Liu Junzhe says, "The switch of emphasis from punishing violators to promoting birth control implies progress in human rights." And as an unidentified official from the State Population and Family Planning Commission explained, "People who do not wish to abide by the country's family planning policy now have legal leeway to exercise what they see as their personal right."

As Zhang Weiqing, former minister of State Family Planning Commission says, there is more to China's family planning than what the Western media call the "one-child policy." Urban couples where both husband and wife are from a single-child family are allowed to have two children. The one-child policy in rural areas applies only to Beijing, Tianjin, Shanghai, Chongqing, Jiangsu and Sichuan. Rural couples in Qinghai, Ningxia, Yunnan, Xinjiang and Hainan and herders of the Han ethnic majority in Xinjiang pastoral areas may have two children. Ethnic minority herders are allowed three to four children depending on their situations. Couples in most rural areas whose first child is a girl are also allowed a second. The birth control policy does not apply either to rural or urban Tibet. In other words, 63.1 percent of Chinese couples are allowed to have one child; 35.6 percent, two; and 1.3 percent, three or more, according to research data by demographer Shao Yifu.

Xiao Li says that since life in the village where he spent his childhood has improved, most villagers now want two children. Rural family planning workers have changed their approach and seldom interfere in unwarranted conceptions. But they arrive smartly on the day an "excess" child is born to collect the obligatory Social Support Compensation.