*China Rolls Out National Childcare Subsidies and Free Kindergarten to Tackle Population Decline*
China has introduced a wide-ranging childcare support package, including nationwide cash subsidies and free preschool tuition, in a significant step aimed at reversing the country’s declining birth rate and easing the financial burden on young families. The new policies, announced in late July and early August 2025, mark the most comprehensive state-backed childcare reforms to date.
Beginning in January 2025, families with children under the age of three will receive an annual subsidy of 3,600 yuan (approximately USD 500) per child. This central government initiative is expected to benefit over 20 million families across the country. A pro-rated payment structure will ensure that children born between 2022 and 2024 are also eligible for partial support.
In addition to the direct cash assistance, the Chinese government announced that tuition fees will be waived entirely for children in their final year of public kindergarten. Private kindergartens that meet government criteria will also receive support to reduce tuition costs. Local governments are tasked with ensuring smooth implementation of these benefits, including the allocation of subsidies to institutions and full coverage of public preschool teacher salaries.
The reforms are supported by a dedicated budget of 90 billion yuan (around USD 12.5 billion) for the year 2025, allocated by China’s Ministry of Finance. This funding is aimed at building a sustainable framework for early childhood education and parental support.
These measures come as China grapples with a shrinking population for the third consecutive year, with the country experiencing historically low fertility rates despite the phasing out of the one-child policy in 2015. Local initiatives in various cities, such as one-time baby bonuses and milk vouchers for new mothers, have previously attempted to boost birth rates, but lacked national coordination and sufficient impact.
Experts welcome the central government’s move as a positive structural shift, acknowledging that while the subsidy amount may be modest relative to the high cost of child-rearing, it sends a clear message about prioritizing family welfare. Analysts also note that further steps—such as expanded parental leave, more accessible daycare, and stronger workplace protections for mothers—will be needed to achieve long-term demographic recovery.
In addition to social considerations, the childcare subsidy is also seen as a tool to stimulate domestic demand in a slowing economy. By reducing financial pressures on families, the government hopes to encourage higher spending and restore consumer confidence.
The new policies signify China’s recognition of the urgency in addressing its demographic challenges. While they may not lead to an immediate baby boom, they represent a crucial foundation for broader family-oriented reforms in the coming years.