Global (Commonwealth Union) _ China has addressed one of its ongoing deep economic crises by introducing a nationwide childcare subsidy, offering US$500 per child under the age of three each year. The decision was announced by state broadcaster CCTV on Monday and will be applied retroactively from January 1, 2025, marking a new phase in China’s approach to population policy.
The initiative comes after three consecutive years of population decline, with 2023 marking the first time China was overtaken by India as the world’s most populous nation. According to official data, only 9.54 million births were recorded last year, approximately half the figure recorded in 2016, when the government ended its decades-long one-child policy.
The new subsidies, jointly introduced by the Communist Party and the State Council, are aimed at “improving public wellbeing” and easing the financial pressures of child-rearing, according to CCTV.
Since early 2023, various local governments have implemented their own incentive schemes. The capital of Inner Mongolia, Hohhot, has offered families who have three or more children up to 100,000 yuan (US$14,000) per newborn, with other cities such as Shenyang and Hangzhou following suit by also implementing tiered monetary benefits depending on birth order.
Various versions of childbirth subsidies have currently been established by more than 20 provinces and cities across the nation. The action aligns with the pledge made by Premier Li Qiang in the government’s annual work report to increase support for families.
However, in spite of the efforts taken, China continues to struggle with low marriage rates and high childcare costs, triggering growing concerns about balancing family life and careers. This has raised significant concerns that economic incentives alone may not be enough to fully resolve these issues. Across the world the need for policy changes such as increased maternity and paternity leave and connivant work from home options for new parents have also been suggested.
In the meantime, ageing population in China continues to rise in number, with nearly 310 million citizens that are aged 60 and above. This issue has raised several questions regarding the long-term sustainability of China’s pension system along with its healthcare infrastructure.
This latest subsidy initiative serves as a foundation for broader social welfare reforms. However, whether the incentive will be effective in reversing the decline in the nation’s population remains to be seen.
