China announces fertility subsidy program as births hit historic lows
While the policy was officially scrapped in 2015 after years of looser enforcement, China now faces unprecedentedly low birth rates — and has announced it will begin offering childcare subsidies for the first, second and third child up to the age of three, starting this year.
Under the plan, families will receive what the government calls a 'fertility bonus' of 3,600 yuan or just over €430 per child until the age of three.
While the national government will pay this 'base' amount, local authorities are free to top it up depending on their own resources. The CCP said the nationwide rollout of cash subsidies will help ease the pressure of childcare expenses and will help to prevent a further decline in the fertility rate.
Crucially, the subsidies will be tax-exempt and excluded from calculations of household or individual income, ensuring they do not affect eligibility for minimum living allowances or extreme poverty assistance.
Why now?
In 2024, China's total fertility (TFR) rate — the average number of children a woman is expected to have over her lifetime according to current patterns — was around 1.15 children per woman. That's among the world's lowest and below the so-called 'replacement level' of 2.1, meaning the baseline for the population size to stay the same.
Demographers use these rates to measure whether a population is shrinking, growing or staying the same. The goal of the new policy would not be to expand the population, but to keep it at a relatively similar size without seeing it skew too heavily towards an ageing population. The latter is a problem faced by many European economies.
According to the World Health Organization, by 2040, around 28% of China's population will be over the age of 60, threatening to disrupt what used to be a growing labour force and competitive wages. This also skews the dependency ratio, with funds in the economy going to supporting elderly relatives, increased healthcare costs and pensions.
In 2022, China's population shrank for the first time since 1961, marking a yearly drop of 850,000 people as deaths outnumbered births. In 2023, the worst year on record, the population fell by approximately 2.08 million, and the decline continued in 2024 — improving only slightly — as it fell by 1.39mn.
Chinese growth miracle is reversed
In 1978, China went through political and economic reforms, including opening up parts of its economy to combat rural poverty and absorbing hundreds of millions of workers into its labour force. It is widely considered one of the fastest economic transformations in history, with China becoming the biggest net exporter in the world and its economy growing an average of about 9.5% per year until 2018.
Of course, the economic clout came with political and diplomatic power. Now, the population decline could lead to China falling on the wrong side of the demographic dividend as its pool of available labour shrinks.
Ultra-low fertility economies
China is not the only Asian country to suffer from this problem and its effects on the economy. Several Asian countries are now considered ultra-low fertility economies, where population decline has become very steep and hard to reverse — even with pro-natalist policies like the child subsidy.
A mix of economic, cultural and demographic dynamics may reinforce a cycle of fewer births in these countries. Economically, this erodes the very demographic dividend that once fuelled the explosive growth of East Asia's richest countries.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Euronews
2 hours ago
- Euronews
European dockworkers demand halt to arms shipments to Israel
European dockworkers are calling on EU governments to halt arms shipments and withdraw diplomatic support for Israel. They stress that international treaties state that weapons should not be exported to war zones where human rights are violated. 'Over the past two years, we've seen an increase in the movement of weapons through civilian ports,' says Josè Nivoi, a key figure in the Genoese dockworkers' movement. 'We've filed a number of legal complaints. An excuse they often use is that they frame it as a private transaction rather than a state-to-state arms transfer — as if they were trading bananas.' For years Nivoi has collected evidence about arms cargo loads in the port as a union manager. Dockworkers accuse authorities of deliberately keeping silent about controversial shipments. 'In Italy, Law no. 185 of 1990 in principle prohibits the transit and shipment of weapons to countries at war. We are calling for civilian ports not to be used to move arms.' In 2024, Italy announced that it had suspended shipments of military equipment to Israel, while honouring contracts signed before 7 October 2023. This translates into over €6 million in weapons, ammunition, maintenance and spare parts. Facts and figures on Israel's weapons' imports Israel imports almost 70% of its arsenal from the US, the world's largest arms exporter. Germany is Israel's second supplier. Since 7 October 2023, it has exported 485 million euros worth of weapons. Italy ranks third, supplying less than 1%. The UN Arms Trade Treaty and the European Common Position state that human rights violations and war crimes should prevent such sales. The EU Council Common Position is legally binding but it lacks enforcement. Member states can interpret it differently. Following the Israel-Hamas war in Gaza, Italy, Spain, Belgium and the Netherlands have halted or restricted exports. There's little scrutiny over Hamas' weapons, mostly from Iran, which has not signed the UN arms trade treaty. Why does Israel receive military support from EU countries? The EU recently found that Israel is breaching its human rights obligations in Gaza. So why does Israel still receive military support from European countries? Giorgio Beretta, one of the most authoritative Italian analysts on the arms trade and a long-standing voice of the Italian Peace and Disarmament Network, explains that treaties are voluntary and then each country must commit to them. 'The regulations are sound. The problem lies in their enforcement, because there is always a wide margin of discretion,' says Giorgio Beretta of the Permanent Observatory on Small Arms, OPAL. Beretta says the information provided to national governments, which are responsible for ensuring weapons are not used to commit human rights violations, is often too vague. 'A general category might be indicated, such as 'aircraft' or 'naval vessels', but there's a big difference between aircraft used for ground attacks and aircraft used for rescue. By the time a parliament reviews exports, the weapons have often already been delivered.' In May, the EU announced a review of the EU-Israel Association Agreement after finding Israel in breach of the trade deal's human rights clause, citing violations in Gaza and the West Bank. By July, the EU had postponed any actions, let alone any sanctions, including a possible arms embargo — yet again exposing its deep-rooted divisions over Israel.
Fashion Network
3 hours ago
- Fashion Network
Steven Madden resets projections following revenue miss
U.S. footwear and accessories brand Steven Madden has pressed pause on its 2025 financial forecast, citing continued uncertainty around new import tariffs. The New York-based company said Wednesday that 'macroeconomic uncertainty related to the impact of new tariffs on goods imported into the United States' has made reliable full-year guidance too difficult to provide. The brand, known for its accessible, fashion-forward designs and widespread wholesale distribution, had already withdrawn its annual forecast in May for similar reasons. Steven Madden remains particularly exposed to shifting trade policies, given its long-standing reliance on Chinese manufacturing. In February, the company reduced the share of its U.S. imports from China to 58%, down from 71%. Executives expect this figure to fall further—to the mid-teens by autumn, and to the mid-single digits by spring 2026—excluding its recent acquisition of British footwear and accessories label Kurt Geiger. In the second quarter, revenue reached $556 million, missing Bloomberg's analyst consensus of $576 million, largely due to underperformance in wholesale. Direct-to-consumer sales, however, exceeded expectations. Adjusted earnings per share stood at $0.20, falling short of the $0.24 estimate. Shares declined 5% in Wednesday's premarket trading. Year-to-date, the stock is down 38% through Tuesday's close.
Fashion Network
3 hours ago
- Fashion Network
China's textile exports stay strong despite falling US orders
Despite trade tensions with the United States during the first half of 2025, China managed to keep its textile and clothing exports stable, shipping $143 billion worth of goods — a slight increase of 0.8%. Breaking it down, clothing exports dipped by 0.2% to $73.5 billion, while textile exports rose by 1.8% to $70.52 billion. However, data from the China National Textile and Apparel Council (CNTAC) shows more variation when viewed month by month. In March, American buyers rushed to place early orders in anticipation of potential tariffs. This led to a 16.5% jump in textile exports and a 9.3% increase in clothing exports. The Trump administration formally announced the new tariffs on April 2. By April, clothing exports had slipped 0.5% year-over-year, while textile exports rose 3.4%. The half-year closed with a 1.1% increase in clothing exports and a 1.6% decline in textiles in June. Between April and May, Chinese textile and clothing exports to the U.S. fell by 20%. However, stronger demand from the European Union, Japan and South Korea helped balance out the losses. This article is an automatic translation. Click here to read the original article.
