China introduces financial incentive as country struggles with low birth rate

It is the latest in a series of moves to encourage families to have children

China is set to introduce a comprehensive policy to cover all out-of-pocket childbirth expenses.

The move is the latest in a series aimed at boosting the nation's declining birth rate.

The national healthcare security administration announced that by 2026, the country intends to offer full reimbursement for all policy-covered medical costs associated with childbirth.

That will include essential prenatal check-ups.

In a report released on Saturday, the administration said it would “improve the level of medical expense coverage for prenatal examinations, striving to achieve 'no out-of-pocket expenses' for childbirth”.

The initiative comes as Beijing confronts a significant demographic challenge. China's population experienced its first decline in decades in 2022, a trend that persisted into 2024.

China’s birth rates have been falling for years (PETER PARKS/AFP/Getty Images)

Demographers anticipate that this trajectory will continue due to falling birth rates, alongside a shrinking workforce.

In June, China mandated that all tertiary hospitals, those with over 500 beds, must offer epidural anaesthesia during childbirth by the end of 2025.

The initiative aims to foster a more "friendly childbearing environment" for women, according to the country’s National Health Commission (NHC).

The NHC also outlined further plans to extend these services to secondary hospitals, which have more than 100 beds, by 2027.

Currently, around 30 per cent of pregnant women in China receive anaesthesia for pain relief during childbirth. This is in stark contrast to some developed countries, where the rate exceeds 70 per cent, according to the China Daily.

China also announced this year that it would offer parents an annual childcare subsidy of 3,600 yuan (£376) in an effort to arrest the country’s declining birth rate.

The scheme will cover all children under three. It will apply retroactively from 1 January 2025, but families with children born between 2022 and 2024 can also apply for partial subsidies, Xinhua news agency reported.

According to the NHC, the nationwide subsidy is expected to benefit nearly 20 million families. The subsidies will not be treated as taxable income or counted when determining eligibility for poverty assistance.