China rolled out on Monday an annual childcare subsidy of 3,600 yuan (about $500) until age three, as authorities look to spur a flagging birth rate with fewer young people choosing to have children.<\/p>\n
The high cost of childcare and education as well as job uncertainty and a slowing economy are among the concerns that have discouraged many young Chinese from getting married and starting a family.<\/p>\n
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\nSubsidies will start from this year, with partial subsidies for children under three born prior to 2025, in a policy expected to benefit more than 20 million families of toddlers and infants, the official Xinhua news agency said.<\/p>\n
The plan is an “important national livelihood policy” and direct cash subsidies would help “reduce the cost of family childbirth and parenting”, the National Health Commission said.<\/p>\n
Demographers and economists said while the move was positive, the amount was likely to small to incentivise people to have children.<\/p>\n
China’s population fell for a third consecutive year in 2024, with experts warning of a worsening downturn, after decades of falling birth rates following a one-child policy adopted from 1980 to 2015, coupled with rapid urbanisation.<\/p>\n
In the past two years provinces nationwide have started handing out childcare subsidies in amounts that vary considerably, from 1,000 yuan a child to up to 100,000 yuan, including housing subsidies.<\/p>\n
The central government will fund the new national policy instead of local authorities, Xinhua said. Authorities are expected to announce more details on Wednesday.<\/p>\n
Zichun Huang, China Economist at Capital Economics, said the sums involved were too small to have a near-term impact on the birth rate or consumption.<\/p>\n
“But the policy does mark a major milestone in terms of direct handouts to households and could lay the groundwork for more fiscal transfers in future.”<\/p>\n
Citi Research estimates a total lump-sum payout of 117 billion yuan in the second half of this year through the plan, saying the scheme is more meaningful as a consumption policy than as a population policy.
\n“As a population policy, it remains to be seen whether the national program can move the needle on fertility rate,” the research house said in a note.<\/p>\n
Authorities in China unfurled a series of “fertility friendly” measures in 2024 to tackle the coming decade’s challenge of the entry into retirement of roughly 300 million people, equivalent to almost the entire U.S. population.<\/p>\n
A nationwide scheme may offer some coordination and signal greater central commitment, said demographer Emma Zang, a professor at Yale University, but called for greater efforts.<\/p>\n
“Without sustained structural investment in areas like affordable childcare, parental leave, and job protections for women, the effect on fertility is likely to remain minimal,” she added.<\/p>\n","protected":false},"excerpt":{"rendered":"
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