China unveils US$500/year subsidy per child under 3 to counter collapsing birth rate and dramatic population decline amid a demographic crisis.
Gaudium Press (08/01/2025, 09:42) – Ten years ago, China abandoned its one‑child policy after thirty‑five years, allowing families to have two children. But playing with such matters has consequences.
The Communist government has announced a new national birth subsidy program to stem a demographic collapse that threatens the country’s future. According to state media reporting in July, the government will grant US $500 per year for each child under three. The measure is retroactive to January 1.
State broadcaster CCTV described the initiative as “an important national policy aimed at enhancing public welfare,” noting that cash payments “help reduce the cost of raising children.” Still, the context is clear: China is facing an unprecedented demographic crisis and is scrambling for ways to reverse the decline.
In 2023, only 9.54 million births were registered—half the 2016 total, the year the one‑child policy was lifted. Despite legislative changes, birth rates did not recover. In 2021, the policy expanded to allow a third child, but the damage was done: the population shrank by 1.39 million in 2023, marking the third consecutive year of decline.
Many economists applaud the subsidies but warn they are unlikely to be enough. Zhiwei Zhang, CEO and chief economist of Pinpoint Asset Management, said:
“It is encouraging that the government finally decided to use tax subsidies to promote fertility,”
while emphasizing that the structural challenges remain profound.
Beijing’s decades-long approach of strict birth control has created a demographic winter that impacts the economy, pension system, and global competitiveness. Now the regime seeks to repair the damage with direct economic incentives. Is it already too late?
Sources: Official agencies / InfoCatólica
Compiled by Gustavo Kralj
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