On Monday, a report from China’s state-run Global Times indicated that starting November 1, authorities in 25 provinces will begin providing “maternity benefits” to women. Essentially, this move comes after exhausting different strategies to tackle the nation’s declining birth rate; they will now incentivize women to have children.
The newspaper noted that since September, regions like Jiangxi, Anhui, and Shaanxi have already started offering direct maternity payments to individuals. This expanded initiative, set to launch next month, plans to encompass nearly 90 percent of social insurance areas across the country. However, notable regions like Beijing, Guangdong province’s tech hub, and the Xinjiang Uygur Autonomous Region are exceptions.
China’s National Health Security Administration (NHSA) explained that the direct maternity subsidy is designed to assist in covering living expenses for female employees during maternity leave. This initiative aims to push China closer to being a “maternity-friendly society.”
Currently, several programs are in place to alleviate childbirth and childcare costs, but past subsidies have mainly gone to employers rather than directly to the women involved. This system has its flaws. A demographic expert remarked that passing the subsidy through employers has led to issues like reductions or delays, suggesting that some employers might even retain part of the subsidy to balance out maternity leave costs. Additionally, this method raises hiring expenses for women workers and doesn’t benefit “flexible workers” such as rideshare drivers or freelancers.
It’s worth noting that some of the direct subsidies are only accessible to women who have made payroll contributions. The NHSA claims that claiming these benefits requires minimal documentation—just proof of contributions—but many argue that the subsidies remain insufficient when stacked against the realities of childbirth, childcare, and education costs.
Louise Lu, who leads Asia research at Oxford Economics, expressed skepticism, stating that reversing the population decline would be “nearly impossible,” even for a resource-rich regime like China. The aftermath of China’s stringent one-child policy has left the younger generation with a shortage of potential mothers, leaving the government in a perplexing situation, expecting people to simply increase childbirth numbers as the population decreases. Similar initiatives in other declining nations, like Japan and South Korea, have yielded only limited outcomes.
As a solution, the Chinese government has initiated financial incentives but may find the efforts too little and too late. A recent announcement detailed a new yearly subsidy of around $500 for the first three years of a child’s life. Some social media users pointed out that if this amount were increased tenfold, they might be more inclined to consider having additional children.
Challenges like fewer children, increased life expectancy, and rising costs of supporting retirees trigger a demographic crisis in many developed nations, with China’s one-child policy exacerbating the situation. Lu estimates that China might see a 0.5 percent dip in GDP growth over the next decade due to this population downturn.
