China says childcare subsidies to 'add new impetus' to economy

AFP | Beijing

Email : editor@newsofbahrain.com

China said yesterday that recently announced subsidies to support families with young children will provide a much-needed economic boost, as Beijing seeks to promote spending and avert a demographic crisis.

Authorities in the world's second-largest economy on Monday declared the new nationwide policy, which offers parents the equivalent of around $500 per child under the age of three per year.

"The childcare subsidy system can directly increase people's cash income," Guo Yanhong, vice minister of China's National Health Commission (NHC), said at a press conference in Beijing on Wednesday.

The measure "will better protect and improve people's livelihoods", Guo said.

"At the same time, it will help promote a virtuous cycle of improving people's livelihoods and economic development, adding new impetus to the sustained and healthy development of the economy," she added.

Chinese leaders have in recent years struggled to breathe life into the economy, beset by a yearslong property crisis that has spooked would-be homebuyers and dissuaded many people from having children.

Beijing has since late last year introduced a series of aggressive pro-consumption policy measures -- including key rate cuts and cancellations of certain restrictions on homebuying -- but results have been limited.

The slump comes as worrying demographic trends have become more pronounced.