In recent years, China has grappled with a deepening demographic crisis characterized by a rapidly declining birth rate, an aging population, and a shrinking workforce. To address these challenges, the Chinese government has introduced a range of policies, including free kindergarten education and birth subsidies for children under three years old. These measures mark a significant shift from the restrictive population control policies of the past, most notably the one-child policy, to pro-natalist strategies aimed at reversing the country’s fertility decline. This report examines China’s proposed childcare subsidies and free kindergarten policies, traces the evolution of its fertility policies over the past decades, and analyzes the challenges and implications of these efforts.

Recent Policy Initiatives: Free Kindergarten and Birth Subsidies

In July 2025, China announced a nationwide childcare subsidy policy to encourage couples to have more children, addressing the country’s record-low birth rate. The policy includes financial support for parents of children under three, alongside plans to expand access to free kindergarten education. These measures aim to alleviate the high costs of child-rearing, which have been identified as a major deterrent to having children, particularly in urban areas where expenses for housing, education, and healthcare are substantial. For instance, a 2022 study estimated that raising a child to age 17 in urban China costs approximately 630,000 yuan, a significant financial burden for many families.

The childcare subsidy policy is part of a broader strategy to create a more supportive environment for families. In August 2022, 17 central government agencies issued a notice outlining plans to increase government-sponsored childcare facilities and services, recognizing the need to reduce the burden of childcare responsibilities, which disproportionately fall on women. Additionally, the Women’s Protection Law, effective from January 2023, aims to strengthen protections for working mothers, including extended parental leave and measures to address discriminatory workplace practices. These reforms reflect an acknowledgment that economic pressures and gender inequalities are significant barriers to higher fertility rates.

However, experts remain skeptical about the effectiveness of these subsidies. Zhiwei Zhang, chief economist at Pinpoint Asset Management, noted that while the policy is a step toward addressing China’s demographic challenges, the financial incentives are modest and unlikely to have a significant near-term impact on birth rates. Similarly, Zichun Huang from Capital Economics argued that the sums offered are too small to substantially influence family planning decisions. Public sentiment echoes these concerns, with many parents citing the high costs of education and housing as persistent obstacles, despite the subsidies.

Historical Context: Evolution of China’s Fertility Policies

China’s fertility policies have undergone dramatic changes over the past seven decades, shaped by economic, social, and political priorities. These policies provide critical context for understanding the current push for free kindergarten and birth subsidies.

1949–1970s: Early Family Planning Efforts

Following the establishment of the People’s Republic of China in 1949, the government initially encouraged population growth to support nation-building and economic development. By the late 1970s, however, China’s population approached one billion, raising concerns about resource scarcity and economic strain. In response, the government introduced family planning initiatives, such as the “Wan Xi Shao” policy in the 1970s, which promoted later marriage, longer birth intervals, and fewer children. These measures reduced the fertility rate from 5.9 in the 1950s to 4.0 by the 1970s, demonstrating the effectiveness of voluntary family planning in a context of rising education and economic development.

1980–2015: The One-Child Policy

In 1980, China implemented the one-child policy, a stringent population control measure aimed at curbing rapid population growth to facilitate economic modernization. The policy restricted most urban families to one child, with exceptions for rural families and ethnic minorities. Enforcement was often harsh, involving fines, forced abortions, and sterilizations, particularly in the early years. For example, in 1983 alone, 14.4 million abortions and 20.7 million sterilizations were performed, many involuntarily.

The Chinese government claims the policy prevented 400 million births, though demographers like Wang Feng argue that this figure is inflated, as much of the fertility decline predated the policy due to socioeconomic changes. The policy also had profound social consequences, including a skewed sex ratio due to a cultural preference for male children, resulting in an estimated 20–40 million “surplus men” by the 2010s. Additionally, the policy accelerated population aging, as the proportion of working-age individuals supporting the elderly declined.

2015–2021: Transition to Two- and Three-Child Policies

By the early 2000s, the demographic costs of the one-child policy became evident, including a shrinking workforce and a fertility rate well below the replacement level of 2.1 children per woman. In 2015, China replaced the one-child policy with a two-child policy, allowing all couples to have two children. However, the anticipated baby boom did not materialize. Births rose briefly in 2016 to 18 million but fell to 15.2 million by 2018, the lowest since 1961.

In May 2021, China introduced the three-child policy, further relaxing restrictions and abolishing the “social maintenance fee” for exceeding birth limits. Despite these changes, the fertility rate continued to decline, reaching 1.15 in 2021 and approaching 1.0 by 2024. In 2022, China’s population shrank for the first time since the 1960s, with only 9.56 million births recorded, a stark contrast to the 21 million births in 1983.

Challenges to Increasing Fertility Rates

Despite the shift to pro-natalist policies, several structural and cultural factors continue to suppress China’s birth rate:

1. Economic Pressures: The high cost of raising children, including education, housing, and healthcare, remains a significant barrier. In urban areas, parents often invest heavily in their children’s education, including after-school tutoring and extracurricular activities, which have become a cultural norm partly due to the one-child policy’s focus on single-child households.
2. Gender Inequality: Women bear a disproportionate share of childcare responsibilities, which often conflicts with career aspirations. The lack of affordable childcare services for children under three exacerbates this burden, as grandparents, who traditionally provide care, are increasingly unavailable due to extended working years following pension age reforms.
3. Cultural Shifts: The one-child policy normalized small family sizes, particularly in urban areas, where single-child households became the social norm. Younger generations, empowered by education and economic independence, increasingly prioritize careers and personal goals over parenthood.
4. Low Fertility Intentions: A 2022 study found that only 9.6% of couples with two children intended to have a third, citing high costs and work-life balance challenges. Families with two daughters were slightly more likely to consider a third child, but overall, knowledge of the three-child policy remains low.

Implications and Future Outlook

China’s free kindergarten and birth subsidy policies represent a pragmatic response to a demographic crisis that threatens economic stability and social welfare systems. However, their success is uncertain. Experiences in other low-fertility countries, such as Japan and South Korea, suggest that financial incentives alone are insufficient to reverse declining birth rates without addressing broader social and economic challenges.

To enhance the effectiveness of these policies, China could consider:

• Comprehensive Childcare Systems: Expanding affordable and accessible childcare facilities for children under three, beyond subsidies, could alleviate the burden on working parents.
• Gender Equality Reforms: Promoting shared parental leave and combating workplace discrimination against mothers could encourage more women to balance careers and motherhood.
• Cultural Campaigns: Public campaigns to shift societal attitudes toward larger families and reduce the stigma of having multiple children may help, though these must respect individual reproductive autonomy.
• Economic Support: Addressing housing and education costs through broader social welfare reforms could make parenthood more financially viable.

The legacy of the one-child policy continues to shape China’s demographic landscape, with its emphasis on small families leaving a lasting cultural imprint. While free kindergarten and birth subsidies are steps toward addressing the fertility crisis, their impact will likely depend on the government’s ability to address deep-rooted economic and social barriers. Without comprehensive reforms, China risks a future of sustained low fertility, with significant implications for its economy and global influence.

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This report draws on a range of sources to provide a comprehensive overview of China’s fertility policies and their implications. For further details on specific policies, refer to official government announcements or academic studies on China’s demographic trends.