In a bold move to reverse its steadily declining birth rate, China has introduced a nationwide subsidy offering families up to 10,800 yuan (approximately $1,500) per child under the age of three. This marks the first nationwide financial incentive of its kind aimed at encouraging citizens to have more children, as the country faces the growing pressures of an aging population and shrinking workforce.

Under the new policy, parents will receive an annual payment of 3,600 yuan (about $500) per child under three. The subsidy applies retroactively from the beginning of 2025, and families with children born between 2022 and 2024 are eligible for partial payments. Authorities estimate that around 20 million families will benefit from the handouts.

This development comes amid growing concern over China’s demographic future. Despite ending the decades-long one-child policy nearly ten years ago, birth rates have continued to fall. In 2024, only 9.54 million babies were born—slightly higher than the previous year but not enough to reverse the downward trend. The total population has decreased for three consecutive years, and the nation’s 1.4 billion people are aging rapidly.

Various local governments have previously trialed their own incentive programs. For instance, the city of Hohhot began offering up to 100,000 yuan for couples having a third child, while Shenyang provides 500 yuan monthly for third children under the age of three. Beijing recently urged local governments to develop plans for free preschool education, signaling a broader push to make parenting more affordable and accessible.

The financial burden of raising children in China is widely recognized as a significant factor deterring young couples from starting families. According to research by the YuWa Population Research Institute, the average cost of raising a child to the age of 17 in China is approximately $75,700—making it one of the most expensive countries in the world for parenting relative to income.