China has unveiled a landmark national childcare subsidy policy, pledging to pay parents approximately 3,600 yuan (about $500) annually for each child under the age of three in a bid to reverse the country’s declining birthrate.
Announced on July 28, 2025, and funded by the central government, the program is expected to benefit over 20 million families across China, marking the first time Beijing has implemented such direct financial support at a national scale.
Under the scheme, families with children born before January 1, 2025, who are still under three will receive prorated subsidies for the months they remain eligible.
The payments are exempt from income tax and will not be factored into eligibility assessments for social assistance, such as minimum living allowances.Provinces are expected to release implementation guidelines and begin applications in late August.
China’s fertility has been in steady decline, with the national tally of births falling over threeconsecutive years. In 2024, the country recorded just 9.54 million births, an increase of only 520,000 from 2023, but still significantly lower than the peak of 17.9 million in 2017.
At the same time, its population shrank by 1.39 million in that year, while the population aged 60 and above surged beyond 310 million.
The subsidy complements existing local pilot programs that have varied widely in scale and ambition. For instance, Hohhot in Inner Mongolia began offering up to 10,000 yuan per yearper child, reaching a total of up to 100,000 yuan for larger families, along with free daily milk to postnatal mothers.
In Tianmen, cash packages for third-time births surpassed 225,000 yuan, including housing allowances and monthly child‑rearing payments, contributing to a 17 percent rise in births in2024.
Experts caution that although the new national subsidy is an important milestone, the amount may be insufficient to significantly change fertility trends by itself. Analysts argue that the core deterrents costs of childcare and education, housing and job insecurity persist, and deeper structural policies such as expanded parental leave, affordable daycare, workplace protections for women, and comprehensive support systems are vital to make a real impact.
The policy comes amid long-term demographic reforms. China phased out its one-child limit in 2016, allowed up to three children in 2021, and ultimately removed birth quotas altogether in 2021. Still, even as legal restrictions eased, birth rates did not recover as expected prompting this shift toward direct incentives.
If implemented effectively, the national subsidy scheme could reduce financial pressures and signal a sustained commitment to population policy reform.
However, authorities and scholars agree it must be paired with enhanced childcare infrastructure, greater education and housing supports, and pro-family workplace reforms to create a truly birth-friendly environment.
Written By Ian Maleve
