China has announced a nationwide subsidy program that will provide parents with $500 per child under the age of three each year, state media reported on Monday, July 28. The initiative, which applies retroactively from January 1, is Beijing’s latest attempt to reverse the country’s declining birth rate and rapidly aging population.
“This is a major nationwide policy aimed at improving public wellbeing,” state broadcaster CCTV stated. “It provides direct cash subsidies to families across the country, helping to reduce the burden of raising children.”
China recorded just 9.54 million births last year, which is half the number from 2016, the year the government scrapped its decades-long one-child policy. The population fell by 1.39 million in 2023, marking the third consecutive year of decline.
Economists and analysts have applauded the government’s move but caution that the subsidies alone won’t solve the country’s demographic woes.
“It is encouraging that the government finally moved to use fiscal subsidies to boost fertility,” said Zhiwei Zhang, president and chief economist at Pinpoint Asset Management. He added that the policy signals Beijing’s recognition of the “serious challenge” posed by low fertility rates to the Chinese economy.
