China’s government will offer subsidies to parents to the tune of $500 per child under the age of three per year, Beijing’s state media said Monday, as the world’s second most populous nation faces a looming demographic crisis.
The country’s population has declined for three consecutive years, with United Nations demography models predicting it could fall from 1.4 billion today to 800 million by 2100.
The nationwide subsidies apply retroactively from January 1, Beijing’s state broadcaster CCTV said, citing a decision by the ruling Communist Party and the State Council, China’s cabinet.
“This is a major nationwide policy aimed at improving public wellbeing,” CCTV said.
“It provides direct cash subsidies to families across the country, helping to reduce the burden of raising children,” it added.
There were just 9.54 million births in China last year, half the number than in 2016, the year it ended its one-child policy, which was in place for more than three decades.
The population declined by 1.39 million last year, and China lost its crown as the world’s most populous country to India in 2023.
Marriage rates are also at record low levels, with many young couples put off having babies by high child-rearing costs and career concerns.
Analysts warned that the subsidies alone would not reverse China’s population decline, nor boost its long-standing domestic spending slump.
“The sums involved are too small to have a near-term impact on the birth rate or consumption,” Zichun Huang, China economist at Capital Economics, said.
“But the policy does mark a major milestone in terms of direct handouts to households and could lay the groundwork for more fiscal transfers in future.”
Many local governments have already rolled out subsidies to encourage childbirth.
In March, Hohhot, the capital of China’s northern Inner Mongolia region, began offering residents up to 100,000 yuan ($14,000) per newborn for couples with three or more children, while first and second children will be eligible for 10,000 and 50,000 yuan subsidies.
In Shenyang, in northeastern Liaoning province, local authorities give families who have a third child 500 yuan per month until the child turns three.
Hangzhou, in eastern Zhejiang province, offers a one-time payment of 25,000 yuan to couples who have a third child.
More than 20 provincial-level administrations in the country now offer childcare subsidies, according to official data.
Premier Li Qiang vowed to provide childcare subsidies during the government’s annual work report in March.
China’s shrinking population is also ageing fast, sparking worries about the future of the country’s pension system.
There were nearly 310 million people aged 60 and over in 2024.
