China Introduces Parenting Subsidy to Boost Birth Rate and Support Young Families
China has taken a significant step towards alleviating the financial burden of raising children and encouraging a higher birth rate with the release of the Parenting Subsidy System Implementation Plan. Effective from January 1, 2025, the plan provides a yearly subsidy of 3600 yuan per child for children under three years old. A key aspect of this policy is that the subsidy will be exempt from individual income tax and will not be counted as income for those receiving minimum living allowances or other forms of assistance.
28 July 2025
This initiative has garnered significant public attention, with many viewing the subsidy as a welcome financial relief, especially for families with infants. While some may see the amount as insufficient to fully address the high costs of childcare in China, the policy signals a strong commitment from the Chinese government to support families and boost the birth rate, which has been declining.
The exemption from individual income tax and the non-inclusion as income for low-income families make the policy more impactful and equitable, ensuring that the benefits reach those who need them most. The policy is expected to benefit over 20 million families, making it a topic of broad public interest and discussion.
The development of the parenting subsidy system in China has seen several key milestones and proposed changes. In 2021, discussions began around improving policies for childcare, youth development, elderly care, and care for the sick and disabled. In 2024, the State Council Office issued a document outlining 13 specific measures across four areas to improve fertility support policies, including improvements to the parenting subsidy system.
The national parenting subsidy system is being considered, with an estimated initial annual subsidy of around 152.8 billion yuan, peaking at 158.7 billion yuan after three years, and then gradually decreasing to about 116.3 billion yuan annually by 2035. International trends towards diversified funding for childcare support are also being explored, with Japan planning to implement a "Children and Childcare Support Fund" system.
Key government bodies and entities involved in the release of the Parenting Subsidy System Implementation Plan include the General Office of the Central Committee of the Communist Party of China, the General Office of the State Council, the National Health Commission, and provincial and local health commissions. Social forces and the market are also encouraged to play a supplementary role in the family subsidy system.
The announcement of the Parenting Subsidy System Implementation Plan on Weibo has garnered significant public attention, with varied sentiment. Many users view the subsidy as a welcome financial relief, while some suggest a broader economic impact, linking the subsidy to increased market demand. The move is largely seen as a positive step towards building a "fertility-friendly society" and an indication of the government's commitment to supporting young families.
However, some implicit sentiment suggests that the subsidy amount may not be substantial enough to address the high living costs that deter some from having children. There is also an expectation and hope that subsidies will increase in the future and that support might extend beyond three years or cover other educational expenses.
Overall, the initial public reaction appears to be cautiously optimistic and largely positive, recognizing the immediate financial benefit and the symbolic importance of government support for parenting. As China moves forward with this initiative, it will be crucial to monitor the effectiveness of the policy in addressing the country's demographic challenges and to continue exploring ways to support families in their child-rearing journey.
