China Offers $500 Annual Childcare Subsidy to Tackle Population Decline

In a bid to reverse its declining birth rate, China will now provide annual subsidies of 3,600 yuan (about $500 or €429) per child under the age of three, according to an announcement by state media on Monday.

This new national policy comes as China faces a deepening demographic crisis, with the country’s population shrinking for the third consecutive year. The number of births in 2024 dropped to 9.54 million, half the figure recorded in 2016, the year Beijing ended its decades-long one-child policy.

The population slowdown, paired with record-low marriage rates, has sparked growing concerns over long-term economic stability. Many young couples in China are delaying or forgoing parenthood due to high living costs, career pressures, and limited family support.

More than 20 provincial-level administrations have already introduced local childcare incentives. Notably, Hohhot in Inner Mongolia offers families with three or more children up to 100,000 yuan per newborn. Similarly, Shenyang in Liaoning province pays families 500 yuan monthly for a third child until the child turns three.

To further encourage family growth, Sichuan province is proposing major reforms, including extending marriage leave from 5 to 25 days and maternity leave from 60 to 150 days, aiming to build what it calls a “fertility-friendly society.”

Experts say these measures are a positive signal but unlikely to reverse the trend alone. Zhiwei Zhang, chief economist at Pinpoint Asset Management, noted the move reflects China’s recognition of the serious economic risks associated with low fertility.

Zichun Huang of Capital Economics called the subsidy a significant milestone in direct household support but warned it’s too modest to boost short-term birth rates or consumer spending.

While the new subsidies may encourage some parents to consider having more children, others remain unconvinced. Wang Xue, a 36-year-old mother from Beijing, said the financial aid was not enough to influence her decision.

“Having one child is manageable, but if I had two, I might feel a bit of (financial) pressure,” she said.

China’s government is expected to continue exploring broader reforms to slow the population decline and sustain long-term economic vitality.