Effective as of the beginning of this year, the government will provide an annual subsidy of 3,600 yuan per child under age 3.
China has implemented a nationwide childcare subsidy program that provides guardians direct cash transfers of 3,600 yuan ($503) annually per child until the age of 3, the state-run news agency Xinhua reported Monday.
The policy, effective as of Jan. 1, 2025, also includes prorated payments for children aged 3 and under born before this year, with subsidies calculated proportionally based on the number of eligible months. For example, a child born in December 2023 is eligible for the full 24 months’ worth of subsidies available, totaling 7,200 yuan.
The National Health Commission described the initiative as a landmark social welfare measure, estimating that it will directly benefit over 20 million families annually by offsetting child-rearing costs.
Wang Haidong, director of the National Health Commission, stated at a press conference on Wednesday that the Commission is working with relevant departments to finalize regulatory documents, including childcare subsidy management standards and fund administration measures.
“With socioeconomic development, China has transitioned from a phase of population growth to one of demographic decline, marked by distinct trends of declining birth rates, population aging, and regional demographic disparities,” Wang said, adding that China is enhancing its fertility support policies to reduce burdens on families and sustain population stability.
According to the policy rollout, local governments will progressively open subsidy application channels starting late August. The central government will establish a childcare subsidy grant, with an initial budget allocation of approximately 90 billion yuan ($12.41 billion) for this year.
Since Panzhihua City in the southwestern Sichuan province pioneered local childcare subsidies in 2021, approximately 20 of China’s 23 provinces have rolled out similar programs, with Yunnan, Anhui, and the Ningxia Hui Autonomous Region achieving full coverage, according to the National Health Commission.
But such policies can place significant demands on local social welfare budgets, and regional fiscal disparities have created uneven reward schemes. This national policy, which applies to first, second, and third children, aims to move childcare support from scattered local trials toward a unified, nationwide strategy.
Ren Yuan, a professor at Fudan University’s Institute of Population Research, told Shanghai-based news outlet The Paper that this national arrangement will play a positive role in improving people’s fertility welfare. “The government is investing real money to support childbirth and enhance people’s well-being, which is a proactive measure,” he said.
A 2023 survey published this past May by Renmin University’s Population Development Studies Center revealed that 70.3% of married childless couples and 77.2% of one-child families deemed childcare subsidies “useful.”
The 2024 China Child-Rearing Cost Report shows that since 2022, the overall cost of raising a child on the Chinese Mainland has increased by 10.9%, and ranks as one of the highest levels globally per GDP. Shanghai families face the highest child-rearing costs, averaging 1.01 million yuan per child from birth to 17. Nationwide, lower-middle-income families spend on average 282,000 yuan, and low-income families spend 126,000 yuan. Childcare costs for children aged 0 to 3 make up 20.5% of total child-rearing expenses across all income levels.
While the total 10,800-yuan subsidy available may therefore be insubstantial to urban middle-class families, it is likely to provide a significant boost for lower-income households.
The introduction of childcare subsidies demonstrates the state’s commitment to addressing fertility challenges, Professor Ren emphasized, but added that policies must also help families balance work and life, as well as address anxieties about childcare and education. To create a truly fertility-supportive society requires shared responsibility beyond economic relief, and requires coordinated efforts from government, businesses, and families, he said.
Editor: Tom Arnstein.
(Header image: VCG)