China's New Plan to Encourage More Births: $500 a Year

Local governments in China have tried mostly in vain to lift the country's shrinking birthrate with perks, cash rewards, and housing subsidies.

- Liyan Qi

Now, the central government is stepping in.

Beijing plans to pay a basic national subsidy of 3,600 yuan (about $500) per child each year until the age of 3, according to a central government decree released recently on local government websites. It is unclear when the subsidies would start.

However, it is uncertain whether that is enough to reverse a trend that poses enormous challenges for China's economy and society. China's fertility rate—the number of children a woman has over her lifetime—is around one now, one of the world's lowest.

Huang Wenzheng, chief researcher of YuWa Population Research Institute, a think tank that was involved in the policy discussions, said the planned subsidy is half or less of what Chinese demographers, economists, and researchers proposed. Huang thinks that the planned spending—about 100 billion yuan, or less than 0.1% of China's GDP—must be 50 times higher to return the fertility rate to the replacement level of around 2.1.

"The mindset is still seeing the spending as costs, not investment in the future," said Huang, who had pushed Beijing to ease birth restrictions over the years, including the abolishment of the one-child policy in 2015.

China's State Council, or cabinet, and the National Health Commission didn't reply to requests for comment.

Bloomberg News reported earlier on the planned subsidies.