China launches first nationwide childcare subsidy to combat population decline

China has unveiled its most comprehensive national effort to address its deepening demographic crisis, announcing a central government-funded childcare subsidy scheme aimed at easing the financial burden on families with young children.

Under the new policy, families will receive an annual subsidy of 3,600 yuan (approximately $502) for each child born on or after January 1, 2025, until the child reaches the age of three, Caliber.Az reports, citing Chinese media.

This represents a potential total benefit of up to 10,800 yuan ($1,505) per child. Children born before the eligibility date but still under three will also qualify for prorated support based on their remaining months of eligibility.

The measure marks China’s first centrally coordinated childcare subsidy scheme, following years of fragmented, locally administered pilot programs that have failed to reverse the country’s declining birth rate. Over 20 provinces had previously implemented their own subsidy models, but with limited nationwide impact.

“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,” noted Huang Zichun, China economist at Capital Economics, in a report released on July 28.

However, Huang cautioned that while the initiative signals a shift in Beijing’s approach, the financial support remains modest. “The sums involved are too small to have a near-term impact on the birth rate or household consumption,” he said.

By Vafa Guliyeva