‘Milestone’: China launches first national childcare subsidies amid birth crisis

China has announced its most significant central-level effort to reverse a deepening demographic crisis since allowing families to have three children, unveiling a long-awaited national childcare subsidy scheme that will provide up to 10,800 yuan (US$1,505) per child under the age of three.

The move came amid mounting urgency among policymakers to stem the population decline and blunt its long-term drag on economic growth and social stability, after years of piecemeal local incentives that failed to reverse the downward trend.

China will provide an annual childcare subsidy of 3,600 yuan for every child born on or after January 1, 2025, until they turn three – regardless of whether they are the first, second or third child, according to a government announcement on Monday.

Children born before that date but still under three will also be eligible for a prorated subsidy based on the remaining months.

More than 20 provinces across China have already experimented with childcare subsidies at various local levels. But this marks the first nationwide scheme introduced by the central government.

“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,” said Huang Zichun, China economist at Capital Economics, in a report published on Monday.

But he also pointed out that the sums involved were too small to have a near-term impact on the birth rate or household consumption.

South China Morning Post