China introduces $1,500 annual child subsidy to tackle falling birth rates

 

In a bold move to tackle a worsening demographic crisis, the Chinese government has launched its first nationwide child-rearing subsidy, offering parents 3,600 yuan (approximately $500 or K12,600) per year for each child under the age of three.

The initiative is expected to benefit around 20 million families across China, as authorities attempt to reverse a steady decline in birth rates. Despite ending its controversial one-child policy nearly a decade ago, China has struggled to encourage larger families.

Announced on Monday, the new policy will allow parents to receive up to 10,800 yuan (roughly $1,500 or K37,800) per child over three years. The subsidy will also be applied retroactively to the beginning of 2025, and families with children born between 2022 and 2024 will be eligible for partial payments.

This follows years of similar efforts at the provincial level, including incentives in cities like Hohhot, where couples with at least three children are being offered up to 100,000 yuan ($13,800), and Shenyang, where parents receive 500 yuan monthly for their third child under three.

In addition to direct cash incentives, China is also moving toward broader family support systems. Authorities in Beijing have recently urged local governments to begin planning for free preschool education — a step aimed at reducing long-term childcare costs.

According to the YuWa Population Research Institute, China ranks among the most expensive countries in the world to raise children. Their study estimates it costs an average of $75,700 (over K2 million) to raise a child to age 17.

China’s population — currently about 1.4 billion — has been shrinking for the third consecutive year. Official figures recorded just 9.54 million births in 2024, a slight increase from 2023 but far from enough to offset the rapid ageing of the population.

The new nationwide subsidy reflects the Chinese government’s growing urgency to address these trends before they begin to impact economic growth and social stability.