Facing a demographic cliff, the Chinese government has started direct support for households with births. The core of the plan is to provide approximately 2 million won in childcare allowances per person over three years for the third child, marking the first time that the central government will pay such allowances.
According to China's state-run Xinhua News Agency, the Chinese government announced the 'Implementation Plan for Childcare Allowance System' on the 28th. Accordingly, each child under the age of 3 can receive up to 10,800 yuan (about 2.08 million won) annually for three years, at 3,600 yuan (about 700,000 won) per year. All three children are supported from first to third. Although various provinces have previously trialed subsidy policies at the local government level, this is the first time the central government has implemented it nationwide.
The childcare allowance will be retroactively applied based on January 1 of this year, allowing infants aged 2 to 3 to receive all their allowances for 2 to 3 years at once. It is expected that approximately 20 million households will receive the childcare allowance annually. According to China's National Bureau of Statistics, the national birth population has been about 28.12 million over the past three years (2022-2024), and if 3,600 yuan is paid per person, it is estimated that about 101.2 billion yuan (approximately 19.62 trillion won) will be required annually.
Professor Song Jian from the Population and Health Academy at Renmin University said to Xinhua News Agency, "Most developed countries with low birth rates internationally support births through childcare allowances," and added, "While the effects may vary for each household in the micro perspective, it can help in improving or suppressing birth rate increases in the macro perspective." However, Huang Zichun, an economist for China at Capital Economics, told the South China Morning Post (SCMP), "The support amount is too small for any short-term effects on birth rates or consumption to be significant."
China, which previously implemented a one-child policy, is currently facing a low birth rate issue similar to that of Korea. China's total fertility rate was 1.08 last year. To maintain the population, this figure must reach 2.1. The number of newborns in China fell below 10 million annually for three consecutive years from 2022 to 2024. Notably, it recorded the lowest number on record in 2023 at 9.02 million, the least since statistics began in 1949. As a result, China's population is expected to decline for three consecutive years, totaling 1.483 billion by 2024. Experts predict it will drop to around 1.3 billion by 2050.
According to SCMP, experts are warning that China must prepare for another decline in births in the coming years. This is due to a sharp decrease in marriage registrations, a key indicator of future birth trends. In 2024, 6.116 million couples registered their marriages, a 20% drop compared to 2023, marking the lowest level since records began.
SCMP points out that "China's low birth rate phenomenon stems from the decline in birth rates due to decades of strict one-child policy implementation and changes in social atmosphere," noting, "Factors such as economic slowdown, increased uncertainty, the burden of child-rearing expenses, competitive social atmosphere, and persistent gender inequality are causes."
Chinese experts also suggest that the current subsidy policies have limitations in increasing birth rates, advocating for comprehensive support in childcare, education, healthcare, housing, and maternity leave. According to China Business News, the State Council discussed the introduction of free early childhood education at a meeting on the 25th, and the day before on the 24th, the State Council's Information Office announced at a press conference that fertility treatment will be included in the national health insurance. Expansion of maternity leave pay for women is also being promoted.
According to China Business News, on the private sector level, over a dozen large companies, including Xiaopeng Motors, Kuaishou, MINISO, and Ctrip, have announced birth incentives such as cash support and extensions of parental leave since 2021.