Childcare subsidies as China deals with one-child policy fallout

BEINJING: China had implemented the one-child policy ruthlessly. It managed to control birth rate and happily surrendered the position of most-populace state in the world to India. But the decades of strict policy produced the unwanted demographic crisis, with a nosediving birth rate, declining population and higher share of aged people. So what now? The answer is childcare subsidies

Meanwhile, the demographic crisis is also a serious threat to the sustainability of Chinese economy. Just check the pension issue.

According to an AFP report, China’s government will offer subsidies to parents to the tune of $500 per child under the age of three per year, Beijing’s state media said Monday.

The nationwide subsidies apply retroactively from January 1, Beijing’s state broadcaster CCTV said, citing a decision by the ruling Communist Party and the State Council, China’s cabinet.

“This is a major nationwide policy aimed at improving public wellbeing,” CCTV said.

“It provides direct cash subsidies to families across the country, helping to reduce the burden of raising children,” it added.

There were just 9.54 million births in China last year, half the number than in 2016, the year it ended its one-child policy, which was in place for more than three decades.

So it is not a surprise that the population declined by 1.39 million last year, and China lost its crown as the world’s most populous country to India in 2023.

Marriage rates are also at record low levels, with many young couples put off having babies by high child-rearing costs and career concerns.