China is taking unprecedented steps to address its declining birth rate. To start, it is launching a new, parent-driven financial incentive program. The policy advances retroactively to the start of 2024. Through direct cash handouts, it promises families 10,800 yuan ($1,500) for each child born during the years 2022-2024. This new initiative aims to reduce the costs of parenthood. In a country where these costs are the highest in the world, advocacy is needed.
Under the scheme, parents would get 3,600 yuan ($560) a year for each child aged under three. This unprecedented financial assistance will help keep more than 20 million families across the country stably housed. Most importantly, it has their back as they balance the high costs of early childhood. China’s population currently is just over 1.4 billion. Yet the urgency to change that concerning trend has deepened, particularly with the nation rapidly aging.
In 2024, China is estimated to have only 9.54 million births, registering a drop in number of births for the third year in a row. The increasing expenses of childrearing—now hitting an all-time average of $75,700 by age 17—only exacerbate this trend. For many families, the inability of the larger households to thrive in an economy with high costs of living is a growing burden.
To counteract these incumbrances, several provinces have piloted their own financial incentives to increase childbirth. For instance, Hohhot, the capital of Inner Mongolia in northern China, provides subsidies of up to 100,000 yuan (about $14,700) for couples to have their third child. In the same vein, Shenyang offers families 500 yuan a month for having a third child that’s less than three years old. These concentrated undertakings illustrate a future-focused understanding that policy-level assistance will be essential to raise birth rates.
Beijing has taken measures to enhance support for families by urging local governments to draft plans for implementing free preschool education. This important initiative will help offset the considerable, ongoing educational costs that families incur as they raise and train children.
As China’s overall population continues to shrink, these measures represent a critical response to a demographic crisis that could have far-reaching implications for the country’s future. The country’s financial incentives from the government are designed to increase the birth rate. They try to ensure that families who have made the choice to have children don’t feel punished for it.