China to Offer $500 Annual Subsidy per Child to Boost Birth Rate

China is offering annual child subsidies to encourage births amid a population decline. With fewer births, low marriage rates, and rising child-rearing costs, provinces are introducing financial incentives like cash payments and extended leave. Experts say the measures are helpful but insufficient to reverse demographic and economic challenges.

The Chinese government will offer parents subsidies of 3,600 yuan ($500, €429) per child under the age of three per year, Beijing's state media said Monday.

China's population has declined for three consecutive years. The world's second most populous nation — after India — is facing an emerging demographic crisis.

The number of births in 2024 — 9.54 million — was half as many as in 2016, the year that ended its one-child policy that was in place for more than three decades.

Marriage rates in China have also hit a record low. Young couples put off having babies due to the high cost of raising children and career concerns.

More than 20 provincial-level administrations in China now offer childcare subsidies, according to official data.

In March, Hohhot, the capital of Inner Mongolia in northern China, started giving families money to have more children. Couples with three or more children can get up to 100,000 yuan for each new baby.

In Shenyang, in northeastern Liaoning province, local authorities give families who have a third child 500 yuan per month until the child turns three.

In order to create a "fertility-friendly society", China's southwestern Sichuan province is proposing to increase marriage leave from 5 to 25 days, and more than double the current 60-day maternity leave to 150 days.

Analysts said the subsidies are a positive step, but warned they won't be enough on their own to reverse China's population decline or lift its sluggish domestic spending.

Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, told Reuters that the new subsidy showed the government had recognized the "serious challenge" that low fertility poses to the economy.

Zichun Huang, China economist at Capital Economics, said the policy marked a "major milestone" in terms of direct handouts to households and could lay the groundwork for more fiscal transfers in the future.

But he also said the sums were too small to have a "near-term impact on the birth rate or consumption."

"For young couples who just got married and already have a baby, it might actually encourage them to consider having a second child," Wang Xue, a mother to a nine-year-old son from Beijing, told AFP.

But she said the new measures would not be enough to convince her to have a second child.

"Having one child is manageable, but if I had two, I might feel a bit of (financial) pressure," the 36-year-old told AFP.