China steps up subsidies, incentives as birthrate plunges – but nothing seems to be helping

China’s central government introduced a childcare subsidy on July 28 that will provide families with 3,000 yuan (around £312) a year for each child under the age of three. The announcement came days after plans were unveiled to roll out free preschool education across the country.

These developments mark a shift from previous years, when the government largely left the issue of addressing China’s declining birth rate to local authorities. Many of those efforts, which range from cash incentives to housing subsidies, have made little difference. By stepping in directly, Beijing has signalled that it sees the situation as urgent.

Fewer Chinese women are choosing to have children, and more young people are delaying or opting out of marriage. This has contributed to a situation where China’s population shrank for a third consecutive year in 2024. An ageing population and shrinking workforce pose long-term challenges for China’s economic growth, as well as its healthcare and pension systems.

Before the central government’s recent roll-out, regions in China had already been experimenting with policies to increase birth rates. These include one-time payouts for second or third children, monthly allowances and housing and job training subsidies.

One of the most eye-catching local policies came from Hohhot, the capital city of Inner Mongolia province. In March 2025, the authorities there began offering families up to 100,000 yuan (£10,400) for having a second and third...

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