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China’s central government introduced a childcare subsidy on July 28 that will provide families with 3,000 yuan ($417.76) a year for each child under the age of three. The announcement came days after plans were unveiled to roll out free preschool education across the country.
These developments mark a shift from previous years, when the government largely left the issue of addressing China’s declining birth rate to local authorities. Many of those efforts, which range from cash incentives to housing subsidies, have made little difference. By stepping in directly, Beijing has signalled that it sees the situation as urgent.
Fewer Chinese women are choosing to have children, and more young people are delaying or opting out of marriage. This has contributed to a situation where China’s population shrank for a third consecutive year in 2024.
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China ranks among the most expensive countries in the world for child-rearing, surpassing the US and Japan. In fact, a 2024 report by the Beijing-based YuWa Population Research Institute found that the average cost of raising a child in China until the age of 18 is 538,000 yuan ($74,931). This is more than 6.3 times as high as China’s GDP per capita.
The burden is so widely felt that people in China jokingly refer to children as tunjinshou, which translates to “gold-devouring beasts.”
Second, the incentives largely don’t address deeper issues. These include expensive housing, intense education pressures, childcare shortages and some workplaces that penalize women for taking time off. Many Chinese women fear being pushed out of their jobs simply for having kids.
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The new measures show that Beijing is taking China’s declining birth rate seriously. But it might be too late. Fertility decline is hard to reverse, with research showing that social norms are difficult to snap back once they shift away from having children.
South Korea has spent decades offering its citizens generous subsidies, housing support and extended parental leave. Yet, despite a recent uptick, its birth rate has remained among the lowest in the world.
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