China Launches National Cash Subsidies to Boost Birthrate

China has launched a national cash subsidy program for parents of young children, a significant move to address the country's declining birthrate. The program, jointly issued by the Communist Party of China Central Committee and the State Council, will provide annual cash payments to eligible families.

The program offers 3,600 yuan annually for each legally born child under the age of 3. This policy will be applied retroactively, starting from January 1, 2025. For children born before that date but still under 3, subsidies will be calculated proportionally based on the number of eligible months.

A unified national system will manage the childrearing subsidy program. These payments will be exempt from personal income tax and will not affect eligibility for social assistance programs. Parents or guardians can apply for the subsidies at the child's registered residence, primarily through online applications, with offline options also available. Funds will be disbursed to bank or financial accounts, with provincial governments determining the payment schedules.

The subsidies are expected to be distributed starting in late August. The National Health Commission indicated that the subsidies could reach up to 10,800 yuan per child.

Last year, China saw 9.54 million newborns, an increase from the previous year, marking the first year-on-year rise since 2017. However, the country's total population still declined.

This new program joins other recent measures aimed at creating a more supportive environment for families. More than 20 provincial-level regions have already piloted childrearing subsidies. Experts believe this nationwide initiative will provide broader and more consistent support.

According to a professor at the School of Labor Economics at Capital University of Economics and Business, the subsidies could benefit over 20 million households annually. The standard was set after careful consideration. While the amount is less than in some European countries, it is considered a major step and a positive signal.

However, financial support alone may not fully address the reluctance of many young Chinese to marry and have children. Further policy support is needed.

As part of a broader package of pro-birth policies, the central government has urged local authorities to introduce free preschool education gradually. Other initiatives include extended marriage leave.

The new subsidies quickly became a popular topic on Chinese social media, and many users welcomed the news. One parent, who recently had a daughter, said the cash subsidy would help ease the financial burden of raising a child. The government has also taken other steps to support young families, such as increasing medical insurance reimbursement rates for childbirth.