China has pledged to establish a childbirth subsidy system and offer further tax cuts for parents in an effort to build a “birth-friendly society” amid a looming demographic crisis.
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Central authorities would also enhance medical, housing and leave benefits for families to ease the costs of raising children as falling fertility rates threaten the prospects of the world’s second-largest economy, according to a package of policies issued by the State Council on Monday.
While different levels of cash incentives were introduced at the local level to stimulate births in the past few years, the central government said it is drafting a detailed national-level plan, with some analysts forecasting an expenditure of up to 500 billion yuan (US$70 billion) per year.
Aiming to create an atmosphere where everyone “respects and supports childbirth” as the nation rapidly ages, the directive from China’s cabinet also vowed to expand income tax deductions for parents and include assisted reproductive services into the national insurance scheme.
Economic and social influences all contribute to a persistently low fertility rate, making any efforts to reverse this trend inherently challenging
Families with multiple children would also be given privileges in home purchasing, including higher public housing loan limits and larger homes when applying for affordable housing, it added.
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As part of a broader stimulus package to revive the economy, Beijing could initiate a programme to encourage childbirth with a budget of around 250 billion yuan to 500 billion yuan per year, economists from Nomura said on Monday.