China Offers $500 per Child to Boost Births

China will offer parents annual subsidies of around $500 (approximately N764,492.21) per child under the age of three in a sweeping new policy designed to address the country’s ongoing demographic decline, state media announced on Monday.

The initiative, which takes effect retroactively from January 1, was jointly approved by the ruling Communist Party and the State Council, China’s cabinet, according to state broadcaster CCTV. The policy is described as a significant nationwide measure aimed at “improving public wellbeing” and alleviating the financial burden of raising young children.

“This provides direct cash support to families across the country,” CCTV reported, as China grapples with the social and economic fallout of its shrinking population.

China has seen its population decline for three consecutive years. The number of births last year dropped to just 9.54 million—barely half of what was recorded in 2016, the year the government scrapped its decades-long one-child policy. In 2023, the population shrank by 1.39 million, and China ceded its position as the world’s most populous country to India. Current projections by the United Nations suggest China’s population could plummet from 1.4 billion today to around 800 million by the end of the century.

Marriage and birth rates have reached record lows, with many young couples discouraged by the high costs of childcare and concerns over work-life balance.

While the new subsidies reflect a shift in central government policy towards direct financial support for families, analysts say the cash incentives alone are unlikely to reverse the country’s demographic downturn or stimulate consumption in the short term.

Many local authorities across China have already introduced their own incentives. In March, Hohhot, the capital of Inner Mongolia, announced payments of up to 100,000 yuan (around £10,700) for families with three or more children. Shenyang in Liaoning province gives families with a third child 500 yuan per month until the child turns three, while Hangzhou in Zhejiang province offers a one-off payment of 25,000 yuan for third children.

According to official figures, over 20 provincial-level governments now provide various forms of childcare subsidies.

Premier Li Qiang reaffirmed the government’s commitment to such support in March, during his annual work report. However, China’s rapidly ageing population remains a looming concern. This year, the number of people aged 60 and above reached nearly 310 million, raising alarm over the long-term viability of the country’s pension system.