Local governments in China have tried mostly in vain to lift the country’s shrinking birthrate with perks, cash rewards and housing subsidies. Now, the central government is stepping in.
Beijing plans to pay a basic national subsidy of 3,600 yuan (about $500) per child each year until the age of 3, according to a central government decree released recently on local government websites. It is unclear when the subsidies would start.
However, it is uncertain whether that is enough to
Local governments in China have tried mostly in vain to lift the country’s shrinking birthrate with perks, cash rewards and housing subsidies. Now, the central government is stepping in.
Beijing plans to pay a basic national subsidy of 3,600 yuan (about $500) per child each year until the age of 3, according to a central government decree released recently on local government websites. It is unclear when the subsidies would start.
However, it is uncertain whether that is enough to reverse a trend that poses enormous challenges for China’s economy and society. China’s fertility rate—the number of children a woman has over her lifetime—is around one now, one of the world’s lowest.
Huang Wenzheng, chief researcher of YuWa Population Research Institute, a think tank that was involved in the policy discussions, said the planned subsidy is half or less of what Chinese demographers, economists and researchers proposed. Huang thinks that the planned spending—about 100 billion yuan, or less than 0.1% of China’s GDP—must be 50 times higher to return the fertility rate to the replacement level of around 2.1.
“The mindset is still seeing the spending as costs, not investment in the future,” said Huang, who had pushed Beijing to ease birth restrictions over the years, including the abolishment of the one-child policy in 2015.
China’s State Council, or cabinet, and the National Health Commission didn’t reply to requests for comment. Bloomberg News reported earlier on the planned subsidies.
The number of newborns in China had plunged for six straight years before a slight, short-term rebound last year following Beijing’s end to Covid-19 restrictions. But only 6.1 million couples registered their marriages in 2024, a 21% fall from the previous year, the latest official data show, marking a record low since the government started releasing such statistics in 1986.
The number of newborns will likely drop further this year, below nine million, demographers say, less than half the level of 2016, when China allowed couples to have two children for the first time since the one-child policy was implemented nationwide in 1980. Other countries, such as South Korea and Japan, also have low fertility rates. But China’s problem is compounded by both fewer women having babies and those that do having fewer babies.
Authorities have held up enticements offered by cities such as Tianmen in Hubei province as having produced the kind of baby boom leaders would like to see nationwide. But it isn’t clear if the incentives there were decisive in prodding couples to have children.
Skyrocketing costs of child rearing in China discourage couples from having children.
So do health scares, such as a recent lead poisoning scandal at a private kindergarten in the western province of Gansu, where 233 children were found to have abnormal blood lead levels, the official Xinhua News Agency reported this month, citing local investigators. Police detained eight people who authorities said allowed kitchen staff to use industrial coloring to make pastry and other foods.
“If I bring a child into a world with poisonous milk formula and foods, why should I rush to have children,” one commentator posted on social media.
Beijing shows some signs of taking demographic challenges seriously, such as gradually delaying the retirement age, but policymakers seem to be adopting a halfhearted approach rather than a comprehensive one, said Ilaria Mazzocco, senior fellow at the Washington-based think tank Center for Strategic and International Studies.
It is hard to see quick returns on policies to encourage births based on such efforts in other countries, such as South Korea and Japan, Mazzocco said.
Beijing’s expenditures on developing AI and other technologies it considers important for national security leaves less to spend on improving social welfare, which in the long term should help lift births, she said.
China’s industrial policy spending, including direct state subsidies to firms and tax incentives, was 1.7% of its GDP in 2019, far above other major economies, according to the most recent estimates by CSIS, a think tank. The trend likely continued following the pandemic, Mazzocco said.
In China many young people are struggling to find jobs amid a cooling economy. And owing to falling births, it is particularly hard on kindergarten teachers.
Kiki Wang, 28, a teacher from Jiangsu, was laid off last month. “It’s not that you are not a good teacher, it’s just we don’t have enough kids,” she recalls her principal telling her. She says she doesn’t know what to do next and is posting on social media for advice.
More than 20,000 kindergartens closed last year in China, with nearly 250,000 teachers losing their jobs, government data show. In China, kindergartens are akin to preschools in the U.S., serving children ages 3 to 5.
When Wang Lin, who has taught at a private kindergarten since she graduated from university five years ago, was invited to the principal’s office for a talk last month, her heart sank. Several of her co-workers had already been laid off when the school in the central province of Anhui cut classes as it struggled to enroll children.
Now it was her turn. No jobs were available at other schools, she said. After briefly considering a career as a vlogger, she is now thinking about applying for jobs at nursing homes, a growth industry in an aging China. “I need to be realistic and find a stable job,” she said.
Write to Liyan Qi at Liyan.qi@wsj.com
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