China launches national child subsidy program

China announced a national cash subsidy program on Monday for parents of young children, marking a significant step in the country's efforts to reverse its declining birthrate.

The program, jointly issued by the general offices of the Communist Party of China Central Committee and the State Council, will offer annual cash payments of 3,600 yuan ($502) for each legally born child under the age of 3. The policy applies retroactively to Jan 1, 2025.

For children born before Jan 1 who are still under 3 years old, subsidies will be prorated based on the number of eligible months. For example, a child born in December 2023 would be eligible for 24 months of subsidies totaling 7,200 yuan.

A unified national system will be established to manage the childrearing subsidy program. The payments will be exempt from personal income tax and will not be counted as household or individual income when calculating eligibility for social assistance programs such as the minimum living allowance.

Parents or guardians can apply for the subsidies at the child's registered residence. Most applications will be handled online, though offline options will also be available. Funds will be disbursed to the applicant's or child's bank or other financial accounts, with provincial governments determining the specific payment schedules.

The subsidies are expected to be distributed beginning in late August and can reach 10,800 yuan per child, the National Health Commission said.

China recorded 9.54 million newborns last year, an increase of 520,000 from 2023 and the first year-on-year rise since 2017. However, the country's total population still declined by 1.39 million last year, data released by the National Bureau of Statistics showed.

The new program added to a series of recent measures aimed at fostering a more birth-friendly environment. More than 20 provincial-level regions have piloted childrearing subsidies in recent years. Experts said that the new nationwide initiative will provide broader and more sustained support to families.

Jiang Quanbao, a professor at the School of Labor Economics at Capital University of Economics and Business, said the subsidies could benefit more than 20 million households annually. He said the standard was set "after careful calculation based on current conditions and abilities".

Although the amount is lower than the subsidies offered in some European countries, Jiang called it a major step and "a positive signal".

However, he noted that financial support alone cannot overcome the widespread reluctance among many young Chinese to marry and have children, and that further policy support is needed.

As part of a broader package of pro-birth policies, the central government urged local authorities on Friday to roll out detailed plans to gradually introduce free preschool education. Other initiatives include extended marriage leave.

News of the new subsidies quickly became a trending topic on Chinese social media on Monday, and was welcomed by many users.

Shi Xukui, 29, from Changsha, Hunan province, welcomed the new policy after the birth of his daughter earlier this month. He said the cash subsidy would help alleviate the financial burden of child-rearing.

He added that the government has taken a series of steps to support young families, including higher medical insurance reimbursement rates for childbirth. He said his family paid just over 1,000 yuan for his wife's cesarean section at a local hospital.