China has launched a new nationwide incentive program offering parents up to 10,800 yuan (approximately $1,500) per child in a bid to address its falling birth rate and looming demographic crisis. The scheme, announced on Monday by state broadcaster CCTV, is expected to support nearly 20 million families and will apply retroactively from the beginning of 2024.
The country’s birth rate has been steadily declining, even after the controversial one-child policy was scrapped nearly a decade ago. Official data from the National Bureau of Statistics shows that China recorded 9.54 million births in 2024 a slight uptick from the previous year, yet insufficient to offset the overall population shrinkage. For the third consecutive year, China’s population has declined, with concerns mounting over a rapidly ageing society and a shrinking workforce.
In an attempt to reverse the trend, several provinces have piloted various cash incentives. In Hohhot, couples with three children are offered up to 100,000 yuan per baby, while in Shenyang, families receive a monthly subsidy of 500 yuan for a third child under the age of three. These local efforts are now being reinforced by the central government’s broader strategy.
Families with children born between 2022 and 2024 will also be eligible for partial subsidies under the new national policy. The Chinese government is also exploring non-financial incentives, such as expanding access to free preschool education, a move encouraged by Beijing last week.
According to a study by the China-based YuWa Population Research Institute, the financial burden of raising a child in China is among the highest globally. The cost of raising one child to age 17 averages around $75,700, creating a significant deterrent for many families.
Demographers warn that if current trends persist, the economic and social ramifications could be severe, including labor shortages, reduced consumer demand, and increased pressure on healthcare and pension systems. The latest cash incentive is part of China’s broader strategy to encourage families to grow though whether financial incentives alone can reverse deep-rooted demographic shifts remains to be seen.
