China introduces incentives and childcare support to combat population decline

China is offering subsidies and benefits to boost birthrates, but experts doubt their impact amid economic and societal challenges.

China is implementing a series of measures to encourage childbirth in response to a continuous population decline and an aging demographic. The nation's population has decreased for three consecutive years, reaching 1.408 billion at the end of 2024 - a reduction of 1.39 million from the previous year. This marks a concerning trend for the Chinese government, which is now scrambling to reverse the effects of decades-long population control policies, particularly the one-child policy that was in effect from 1979 to 2015.

In Hohhot, the capital of Inner Mongolia, authorities have introduced new childcare subsidies and a program providing free daily milk to new mothers. Couples are eligible for financial incentives for each child, with a maximum annual subsidy of 10,000 yuan (approximately $1,500) for a third child until the age of 10. Moreover, new mothers receive an electronic voucher worth 3,000 yuan ($450) for dairy products from leading companies Yili and China Mengniu Dairy.

These initiatives are part of broader efforts, as over 20 provincial administrations have begun offering similar subsidies to encourage marriage and childbirth. Premier Li Qiang recently announced plans to boost consumption by increasing wages, providing childcare subsidies, and supporting emerging markets like artificial intelligence products and winter tourism. These measures aim to raise consumer confidence and stimulate the economy, aligning consumption with broader social goals, including elderly care and work-life balance.

Despite the relaxation of the one-child policy in 2015, birthrates have continued to fall, with the fertility rate hitting 1.09 in 2022. The number of kindergartens has also declined by more than 5% in 2023, reflecting the shrinking birthrate and an aging population. Many experts argue that the one-child policy, though lifted, has left lasting effects, as societal expectations and economic pressures have made it difficult for young families to consider having multiple children.

To address these challenges, the government has introduced policies such as extending maternity insurance to flexible workers, enhancing childbirth support, and adding reproductive services to medical insurance. Local governments are also contacting married women to discuss childbearing plans and offering substantial cash subsidies to families willing to have multiple children. Universities have been asked to introduce courses on love and relationships to foster romantic partnerships among students.

However, experts remain skeptical about the effectiveness of these measures, citing economic challenges and high living costs that deter young people from starting families. The legacy of the one-child policy continues to impact China, with ongoing efforts to boost birth rates and support larger families.

As China grapples with these demographic shifts, the effectiveness of these policies remains to be unfolded. The government continues to explore various strategies to create a supportive environment for parents and encourage higher birth rates, in a robust effort to reverse decades of population control.