Second-child policy boosts demand for nannies, helping to lift more rural poor out of poverty ahead of CPC centenary

The central government has decided to upgrade an industry that has created jobs for tens of millions of rural women - household service.

The State Council released a guideline on Wednesday that encourages domestic service providers to sign labor contracts with their employees, pay salaries higher than the minimum wage, and offer social security to them.

Enterprises answering the call will qualify for value-added tax deductions, easier loans and diversified financing channels, the guideline said.

It urged the setting up of related majors in colleges and training programs run by home service enterprises. Sharing of information will also be enhanced between cities with huge demand for home services and less developed areas with large populations, it said.

The guideline said a credit system will be created to ban workers who misbehave from entering the industry again.

China had about 28 million domestic workers in 2017, when the revenue of the home service sector reached 440 billion yuan ($64 billion), up 26 percent year-on-year, according to the National Development and Reform Commission, the country's top economic planner.

Despite the rapid growth, the home service sector, which employs many migrant workers, is known for its instability and lack of job security.

The latest move is expected to bring about drastic changes to home service enterprises that mostly function as matchmakers. In that role, they have not been obliged to offer pre-work training and have not been held accountable for work related accidents.

Jiang Ying, a professor at China University of Labor Relations, said the aging population and the universal second-child policy have fueled growth in the sector, but its casual arrangement has hampered its further development.

It has made it difficult to discern a nanny's background and credentials, and left them out of the work injury insurance net, she said.

But Jiang added that apart from helping the rural workforce seek jobs that boost their income, it is essential for government to help solve follow-up issues such as the senior citizens and children left behind in rural areas.

China still has more than 10 million rural poor waiting to be lifted out of poverty by the end of next year, in time for the centenary of the Communist Party of China in 2021.

Providing jobs to those impoverished people is seen as an essential means to help raise their income above the national poverty line - an average of 2,300 yuan ($335) for every family member a year, set in 2010, adjusted for purchasing power parity.

The domestic sector, though skill-based, has limited educational requirements and has long been favored by rural woman seeking jobs in cities. Skilled domestic workers, such as a postpartum nanny, can earn between 10,000 to 20,000 yuan a month in Beijing.

China had more than 149 million people 65 years of age or older in 2016, according to the National Bureau of Statistics. Experts predict the number of people who are age 60 or older could reach 500 million by 2050, creating explosive demand for care services.

As most parents in China rely on their own parents or other relatives for child care, the aging of society is likely to create demand for nannies, especially after the universal second-child policy was adopted in 2016.

Beijing college professor Wang Bin, 38, who hired a postpartum nanny after he and his wife had their first child this year, said pressure from work, aging parents, and their own inexperience as parents had all contributed to the decision.

"Nannies are quite experienced and it saved a lot of trouble," he said.

The NDRC said in a news release that the demographic changes, along with urban residents' ever-increasing purchasing power, are fueling growth in the home service sector of about 20 percent year-on-year.

Despite the demand, a flurry of cases involving unqualified nannies has sparked public fury in recent years.

One of the most high-profile cases centered on a woman named Mo Huanjing, a nanny who was accused of arson and sentenced to death last year.

Mo, 35, with heavy gambling debts, managed to obtain a live-in nanny job at a home in Hangzhou in 2016. She was later found guilty of setting a fire that she had intended to put out to win the family's gratitude and financial payback. But the fire spread quickly, killing four in the house.

Another case that grabbed nationwide attention involved a woman named He Xiaoping, 48, from Nanchong, Sichuan province. In 1992, He went to Chongqing and became a nanny using fake identification papers. During her work, He took her client's 1-year-old boy away and returned to her hometown.

She revealed her secret in 2017 after watching a television show that helps people find long-lost relatives, which she said touched her deeply.

The NDRC said the guideline is essential as it seeks to fix problems from the top and improve the policy system, and will answer people's concerns.