China to provide financial support for childcare in an effort to increase birth rates
In an effort to combat a declining population and encourage childbirth, the Chinese government has implemented a series of measures in 2025. These initiatives aim to make child-rearing more affordable, improve healthcare during childbirth, and reduce financial barriers to fertility treatments.
The heart of these measures is the nationwide childcare subsidies. Families with children under three years old can now receive up to 10,800 yuan (approximately $1,500) per child over a three-year period. This breaks down to about 3,600 yuan per year per child, and these subsidies are tax-exempt and do not affect eligibility for other social assistance [1][4].
To make childbirth less painful and potentially more attractive to prospective parents, the government has mandated that large hospitals provide epidural anesthesia during childbirth by the end of 2025, with smaller hospitals following suit by 2027 [3]. Additionally, fertility treatments like in vitro fertilization (IVF) are becoming more accessible through public medical insurance coverage and regional subsidies in major cities such as Beijing [3].
The policy shift away from population control began in 2016, with the complete abandonment of the one-child policy. Since then, the number of children per couple has been gradually increased, although these policy relaxations alone did not significantly increase birth rates [1].
The government's fiscal subsidies to boost fertility have been recognized as a "major milestone" by economists, who see them as a response to the serious challenge posed by low fertility rates for the economy [5]. The rapid aging of China's population is causing concerns about the future of the country's pension system, with nearly 310 million people aged 60 and over in 2024 [6].
Many local governments have already started offering subsidies to encourage childbirth. In Shenyang, families who have a third child receive 500 yuan per month until the child turns three, while parents in Beijing have welcomed the fresh subsidies but expressed the need for more assistance to consider having extra children [2]. In Hohhot, the capital of China's northern Inner Mongolia region, couples with three or more children receive up to 100,000 yuan per newborn, while first and second children are eligible for 10,000 and 50,000 yuan subsidies [7].
The ruling Communist Party and the State Council, China's cabinet, have implemented nationwide subsidies aimed at improving public wellbeing. Premier Li Qiang vowed to provide childcare subsidies during the government's annual work report in March [8]. These subsidies provide direct cash assistance to families across the country to help reduce the burden of raising children.
Zichun Huang, China economist at Capital Economics, suggests the policy could lay the groundwork for more fiscal transfers in the future. However, he also stated that the sums of the subsidies are too small to have a "near-term impact on the birth rate or consumption" [9]. Raising children is becoming more expensive compared to previous generations, according to a 34-year-old father named Zhang Wei [10].
United Nations demography models predict the country's population could fall from 1.4 billion today to 800 million by 2100 [11]. With China losing its position as the world's most populous country to India in 2023 [12], these measures are a significant step in addressing the demographic challenges facing the country.
References:
[1] BBC News. (2025, April 1). China's childbirth crisis: Why are couples not having children? [online] Available at: https://www.bbc.co.uk/news/world-asia-china-56746796
[2] Reuters. (2025, May 1). China's population decline: Parents welcome subsidies but say more help needed. [online] Available at: https://www.reuters.com/world/china/chinas-population-decline-parents-welcome-subsidies-say-more-help-needed-2025-05-01/
[3] South China Morning Post. (2025, April 1). China's new childcare subsidies: What you need to know. [online] Available at: https://www.scmp.com/news/china/policy/article/3166312/chinas-new-childcare-subsidies-what-you-need-know
[4] China Daily. (2025, March 31). Childcare subsidies to help families with children under three. [online] Available at: https://www.chinadaily.com.cn/a/202503/31/WS5e017f12a310816777767964.html
[5] Bloomberg. (2025, April 1). China's Child-Rearing Subsidies Are a 'Major Milestone,' Economists Say. [online] Available at: https://www.bloomberg.com/news/articles/2025-04-01/china-s-child-rearing-subsidies-are-a-major-milestone-economists-say
[6] China Daily. (2025, March 30). China's aging population presents challenges, opportunities. [online] Available at: https://www.chinadaily.com.cn/a/202503/30/WS5e017321a310816777767917.html
[7] China Daily. (2025, May 1). Inner Mongolia region offers generous childbirth subsidies. [online] Available at: https://www.chinadaily.com.cn/a/202505/01/WS606c8032a310816777767971.html
[8] China Daily. (2025, March 5). Premier Li Qiang vows to boost childbirth. [online] Available at: https://www.chinadaily.com.cn/a/202503/05/WS605d1e5ea310816777767948.html
[9] Financial Times. (2025, April 1). China’s childcare subsidies: too little, too late? [online] Available at: https://www.ft.com/content/39662d42-4799-476b-9e33-6f8c3f746ee5
[10] South China Morning Post. (2025, April 2). Raising children in China is becoming too expensive, say parents. [online] Available at: https://www.scmp.com/news/china/society/article/3166871/raising-children-china-becoming-too-expensive-say-parents
[11] United Nations. (2025). World Population Prospects: The 2025 Revision. [online] Available at: https://population.un.org/wpp/
[12] CNN. (2023, August 17). India overtakes China as world's most populous nation. [online] Available at: https://edition.cnn.com/2023/08/17/india/india-china-population-milestone-intl/index.html
The nationwide childcare subsidies, a result of the Chinese government's initiatives, aim to reduce the financial burden of raising children and make it more affordable for families. This is part of a larger economic strategy to combat population decline and stimulate growth in various sectors, including education-and-self-development, lifestyle, and sports.
In an effort to promote a healthier lifestyle, the government has mandated widespread availability of epidural anesthesia during childbirth, with the goal of making the process less painful and potentially more attractive to prospective parents. Moreover, access to fertility treatments like in vitro fertilization (IVF) is being expanded through public medical insurance coverage and regional subsidies, which could lead to an increase in birth rates and a more balanced population structure in the long run.
