$500 Per Child: China’s Latest Push to Tackle Its Demographic Crisis

In a bid to combat its declining birth rate, China has launched its first-ever national child subsidy program, offering parents 3,600 yuan (approximately $500 or £375) annually for each child under the age of three.

Despite scrapping the one-child policy nearly a decade ago, the country continues to see a drop in new births. This latest initiative aims to ease the financial burden of child-rearing for around 20 million households, according to reports from state-run media.

Several regions in China had already introduced localized incentive programs, but this move marks the first uniform policy across the nation. Under the new scheme, parents could receive up to 10,800 yuan per child, with the policy taking effect retroactively from January 2024.

Families with children born between 2022 and 2024 may also qualify for partial payments under the subsidy.

Before this national rollout, various Chinese cities had piloted similar schemes. For example, Hohhot, a city in northern China, began offering couples up to 100,000 yuan per child for families with three or more children. Meanwhile, Shenyang, located northeast of Beijing, provides a monthly allowance of 500 yuan for a third child under the age of three.

Additionally, the central government has encouraged regional authorities to explore other supportive measures. Recently, local governments were asked to develop plans for free preschool education, signaling broader efforts to support young families.

According to research by the YuWa Population Research Institute, China is among the most expensive countries in the world to raise children when costs are measured relative to income. The study estimated the average cost of raising one child to the age of 17 to be around $75,700.

Despite a modest increase in births—9.54 million babies were born in 2024—the overall population continues to shrink, marking the third consecutive year of decline, based on data from the National Bureau of Statistics.

With a population of 1.4 billion that is rapidly aging, policymakers are under increasing pressure to reverse this trend, as a shrinking and older population could pose long-term challenges for the country’s economy and workforce.

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