China has launched its first nationwide childcare subsidy programme to encourage families to have more children and combat the country’s deepening population decline.
The programme provided an annual subsidy of 3,600 yuan, approximately $500 or £375, for each child under the age of three, and it applies to all children under the age of three, born on or after January 1, 2025.
The subsidy would be paid until the child turns three, with a total payout of up to 10,800 yuan per child over three years. Approximately 20 million families are expected to benefit from this programme.
Children born prior to this date but still under three would receive a prorated amount based on the number of eligible months.
The central government would fund the subsidy programme, marking a shift in responsibility from local to national authorities.
The declining birth rate and rising child-rearing costs have prompted the Chinese government to introduce this subsidy programme.
The cost of raising a child to age 17 in China is estimated to be around $75,700, making it one of the most expensive countries globally relative to household income.
Despite a slight increase in births in 2024, China’s overall population has continued to shrink for the third consecutive year.
Some cities in China have already introduced their own incentives to encourage childbirth. They offers up to 100,000 yuan per newborn to couples with at least three children. Provides a monthly subsidy of 500 yuan for families with a third child under age three.
While the subsidy programme aimed to ease the financial burden on young families, experts doubt its immediate impact on birth rates.
The subsidy amount is considered too small to offset the high costs of childcare and education, job insecurity, and a sluggish economy. Nevertheless, the program is seen as a significant step towards supporting families and could pave the way for more comprehensive policies.
