CHINA

China Earmarks $12.5 Billion for Childcare Subsidies to Stop Plummeting Birthrate

By Xu Wen, Zhou Xinda, Ma Shiwen and Han Wei

Published: Jul. 31, 2025 5:50 a.m. GMT+8

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In 2023, China saw its fertility rate hit a historic low of 1.01 — far below replacement level after consecutive years of population decline

China detailed the rollout of its first national childcare subsidy on Wednesday, earmarking about 90 billion yuan ($12.5 billion) this year to assist families with children under the age of three. The move comes as the country grapples with falling birthrates and a rapidly aging population.

Announced on Monday, the program will offer families an annual cash payment of 3,600 yuan for each child under three. Applications for the benefit will open by the end of August, according to officials from the National Health Commission NHC.

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China launched its first national childcare subsidy in 2024, allocating 90 billion yuan ($12.5 billion) to support children under age three, with annual payments of 3,600 yuan per child.
The subsidy covers all children born after Jan. 1, 2022; the central government funds 85–95% depending on region.
Despite the initiative, experts note the subsidy size is below what’s needed, as China’s fertility rate fell to 1.01 in 2023.

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Who’s Who

UBS Group AG: UBS Group AG is mentioned in the context of China's new national childcare subsidy. Wang Tao, identified as the chief China economist for UBS Group AG, had previously estimated that a national subsidy of this nature would cost over 200 billion yuan per year. This detail highlights a financial expert's perspective on the scale of spending required for such a policy, which contrasts with the 90 billion yuan budgeted by the Chinese government for 2024.

Alipay: Alipay is one of the third-party applications through which parents in China can apply for the national childcare subsidy. The subsidies are tax-exempt and paid directly into designated bank accounts.

WeChat: WeChat is mentioned as a third-party application through which parents in China can access the unified national online system to apply for childcare subsidies. The subsidies, which are tax-exempt, will then be paid directly into designated bank accounts.

AI generated, for reference only

What Happened When

2021：: China officially adopted its 'three-child policy' as population concerns grew.

After 2021：: More than 20 provinces launched their own childcare incentives, often limited to second and third children.

Jan. 1, 2022：: All children born after this date are made eligible for the new childcare subsidy.

2023：: China's fertility rate fell to a historic low of 1.01 after consecutive years of population decline.

Jan. 1, 2025：: China's first national childcare subsidy policy officially took effect, allowing families to receive cash payments for eligible children.