China Plans Nationwide Cash Incentives to Boost Birth Rate

China is set to roll out a nationwide financial incentive program to encourage couples to have more children, amid a persistent decline in birth rates and a shrinking population.

According to sources familiar with the matter, who spoke to Bloomberg on condition of anonymity, the Chinese government plans to offer annual cash subsidies of 3,600 yuan (about $503) for each child born after January 1, 2024.

The payments would continue until the child reaches the age of three, as part of a new national policy aimed at reversing the demographic downturn.

This initiative comes nearly a decade after China officially ended its decades-long one-child policy. Despite introducing a two-child policy in 2016 and later allowing families to have up to three children, birth rates have continued to decline.

In 2023, China recorded just 9.54 million births, almost half the 18.8 million recorded in 2016, the year the one-child policy was scrapped.

The trend has raised alarm bells in Beijing, as a shrinking workforce poses long-term risks to the world’s second-largest economy by threatening productivity and economic growth.

United Nations projections suggest that China’s population could drop to 1.3 billion by 2050 and fall further to 800 million by the end of the century, significantly reducing its global economic and demographic influence.

In 2023, China also lost its position as the most populous country in the world to India, underscoring the urgent need for effective population growth strategies.