China’s Struggle with Declining Birth Rate: Are New Measures Enough?

On July 28, 2023, the Chinese government announced a new childcare subsidy. Under this initiative, families will receive 3,000 yuan (around ₹35,000) annually for each child under three. This news came shortly after plans to rollout free preschool education across the nation. These steps show a clear change in approach, as up until now, the responsibility for boosting the declining birth rate was largely left to local governments. Unfortunately, previous local efforts, which included cash benefits and housing support, generally did little to improve the situation. By directly intervening, Beijing is indicating that it views the issue as urgent.

The Decline in Births

More and more women in China are choosing to delay or completely opt out of having children. Young people are postponing marriage, contributing to a troubling trend: China’s population has shrunk for the third consecutive year in 2024. An ageing population coupled with a declining workforce poses significant challenges not just for the economy, but also for healthcare and pension systems.

Before the central government’s recent efforts, various regions had already tried different strategies to boost birth rates. Some implemented cash bonuses for having a second or third child, monthly allowances, and subsidies for childcare and job training. One of the most notable initiatives came from Hohhot, the capital of Inner Mongolia. In 2025, the city began offering families up to 100,000 yuan (around ₹12,50,000) for each second or third child, distributed annually until the child turns ten. Other cities like Hangzhou also introduced childcare vouchers or daycare support, with these initiatives leading to slight increases in birth rates in certain areas. However, these local efforts failed to change the national trend.

Why Aren’t Incentives Working?

Several factors explain why these incentive-based policies don’t seem to make a significant impact. First, the subsidies are quite small, often equivalent to just a few hundred dollars. This amount barely covers the cost of raising a child in urban China, which is one of the most expensive countries for childrearing. A report by the YuWa Population Research Institute in 2024 estimated that raising a child until the age of 18 costs, on average, 538,000 yuan (roughly ₹60,00,000). This is over six times China’s average GDP per capita.

Furthermore, the underlying issues that make parenting difficult in China remain unaddressed. High housing costs, educational pressures, and workplace cultures that penalize women for taking maternity leave contribute to widespread reluctance to have more children. In many cases, women fear losing their jobs simply for deciding to start a family.

While some local governments have attempted to tackle these structural challenges, their successes remain localized. For example, in Tianmen, parents of a third child can receive support of about $16,500 (around ₹10,00,000) when buying a new home. Unfortunately, such measures are often limited to specific areas and fail to reach a wider audience.

Gender Inequality Plays a Role

Another critical aspect is the entrenched gender inequality within society. Women still bear the brunt of childcare and household responsibilities, which is evident in parental leave policies. While mothers may receive 128 to 158 days of maternity leave, fathers get merely a few days, creating an imbalance. Although there are public calls for equal parental leave, substantial legal changes appear distant.

As a result, many young people in China are losing interest in marriage and parenthood. A survey from 2022 showed that 90% of respondents said they wouldn’t consider having more children even if offered an annual subsidy of 12,000 yuan (around ₹1,50,000), significantly more than the recently announced 3,000 yuan support.

Is It Too Late for China?

The new measures indicate that Beijing is taking these challenges seriously, but it might be too little, too late. Fertility declines can be challenging to reverse; social norms tend to change in a way that makes it difficult to return to previous attitudes. Countries like South Korea have implemented generous subsidies for decades yet still struggle with low birth rates.

Predictions from the UN are concerning. They forecast that China’s population could decline by 204 million between 2024 and 2054, and potentially by 786 million by the end of the century, returning the population to levels unseen since the 1950s.

Nonetheless, recent announcements are significant. They represent the first time the central government has directly utilized financial tools to encourage births, recognizing that making preschool education more affordable could be a key factor.

A Need for Holistic Approaches

While these cash incentives are a step in the right direction, simply providing money isn’t enough. For families to feel encouraged to have children, there must be a shift in workplace cultures, educational pressures, and housing affordability. Parenting should be viewed as a shared responsibility rather than solely a woman’s duty.

My generation, born under the one-child policy, remembers a time when having more than one child was heavily penalized. Just as fines did not stop many from wanting larger families, cash handouts alone are unlikely to convince those uninterested in parenthood.

Conclusion

In summary, while China is making efforts to combat its declining birth rate, these measures will require careful consideration and broader societal changes to have lasting effects. It remains to be seen whether these steps can genuinely reverse trends that have been developing for years.

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Original Text – https://scroll.in/article/1085172/china-steps-as-subsidies-incentives-as-birthrate-plunges-but-nothing-seems-to-be-helping?utm_source=rss&utm_medium=public