China offers parents $500 per child to help boost birth rate

Summary

Marketplace Morning Report: China Offers Parents $500 per Child to Boost Birth Rate

Release Date: July 29, 2025

In this episode of the Marketplace Morning Report, hosted by Liana Byrne and presented by Marketplace in collaboration with the BBC World Service, the spotlight is on China's newly introduced policy offering financial incentives to parents to counteract a declining birth rate. The episode delves into the economic and cultural factors driving this policy shift, alongside other significant global economic news.

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China’s $500 Per Child Subsidy: A Strategic Move to Reverse Declining Birth Rates

Liana Byrne opens the discussion by highlighting China's initiative to provide parents with approximately $500 annually for each child under the age of three. This marks China's first nationwide subsidy aimed at encouraging families to have more children, targeting around 20 million eligible families.

Katie Silver, a BBC correspondent, provides an in-depth analysis of the situation:

• Demographic Crisis: China is grappling with a significant decline in birth rates, experiencing three consecutive years of decreasing annual births. "In the last three years, we've seen the country's birth rate falling," Katie notes at 02:12. This trend has led to a shrinking population, exacerbating the future labor force shortage due to an aging demographic.

• Economic Pressures: Raising a child in China is notably expensive. Research indicates that the cost of raising a child to age 17 averages around $75,700, placing China among the world's most costly countries for child-rearing. "According to research there, they found that China is actually among one of the world's most expensive places to have children in relative terms," Katie explains at 03:14.

• Cultural Shifts: The legacy of China’s one-child policy has deeply ingrained cultural norms that discourage larger families. Additionally, urbanization and migration have distanced young couples from traditional family support systems, while educated women face societal expectations to balance career and extensive family responsibilities, further deterring family expansion. "There's also other factors like rural urban migration... and do the lion's share when it comes to things like childcare and all of that, of course, disincentivizes procreations," Katie elaborates at 03:34.

• Policy Implementation: The subsidy is designed to be retroactive, allowing families who have had children in the recent past to apply for partial subsidies, thereby broadening the policy's reach and potential impact. "They're predicting that's going to benefit about 20 million families," Katie mentions at 02:50.

Liana Byrne underscores the urgency of the policy shift: "China didn't want people to have more than one child. But now they're giving government incentives to have more children," highlighting the dramatic reversal in population control strategy at 02:02.

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Other Economic Highlights

Following the primary focus on China's demographic policies, the report transitions to other pivotal economic developments:

1. AstraZeneca's Financial Performance:

   • AstraZeneca surpassed second-quarter profit forecasts, driven by robust sales in cancer, heart, and kidney medications. The company's expansion in the U.S. market, backed by a $50 billion investment, underscores its strategic growth initiatives.

2. Stellantis Faces Financial Strain:

   • Stellantis, the automotive giant behind brands like Fiat and Peugeot, reports a $2.6 billion net loss for the first half of the year. The company attributes this downturn to a $1.7 billion impact from U.S. import tariffs, alongside a nearly 25% drop in shipments to North America.

3. U.S.-Mexico Water Treaty Tensions Amid Severe Drought:

   • A longstanding 1944 water-sharing treaty between the U.S. and Mexico is under threat due to severe drought conditions in northern Mexico. The treaty mandates Mexico to supply water from the Rio Grande to Texas, while the U.S. provides from the Colorado River to Mexican border cities like Tijuana and Mexicali.
   • Will Grant, the BBC reporter, narrates the dire situation at Lake Toronto in Chihuahua state, where the reservoir has plummeted to 14% of its capacity, leading to halted agricultural activities and ecological distress. "I've never seen the situation get this dire," Rafael Betanze, a long-time water authority monitor, remarks at 07:16.
   • The drought-induced scarcity has led to tensions, with former President Trump publicly accusing Mexico of "stealing water" and threatening economic sanctions, to which Mexican communities argue the treaty is outdated and unfeasible under current climate realities.

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Final Thoughts

The episode effectively captures the intersection of demographic policies, economic challenges, and environmental crises shaping global landscapes. By presenting expert insights and on-the-ground reporting, Marketplace Morning Report offers listeners a comprehensive understanding of the factors influencing today's economic and social environments.

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Notable Quotes:

• "In the last three years, we've seen the country's birth rate falling." — Katie Silver (02:12)
• "According to research there, they found that China is actually among one of the world's most expensive places to have children in relative terms." — Katie Silver (03:14)
• "We are not able to water crops. You can see that the dam lies idle." — Rafael Betanze (07:16)

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This detailed summary provides a comprehensive overview of the episode, ensuring that listeners gain valuable insights into China's efforts to counteract demographic decline and other significant economic issues without having to listen to the full podcast.

Transcript

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[Liana Byrne]

China's gonna pay parents to have more babies. Good morning. This is the Marketplace morning Report and we're live from the BBC World Service. I'm Liana Byrne. So parents in China are being offered a little extra help. About $500 a year for every child under three. It's the government's first nationwide subsidy to try and bo boost birth rates. State media says around 20 million families are eligible for the payments. The BBC's Katie Silver is taking a look at this one for us. Hi, Katie.

[Katie Silver]

Hi, Liana.

[Liana Byrne]

Ten years ago, China didn't want people to have more than one child. But now they're giving government incentives to have more children. So why introduce this incentive now?

[Katie Silver]

They are desperately looking at how they can try and increase these birth rates, try and give households with young children more spending power because they are facing this looming demographic crisis. In the last three years, we've seen the country's birth rate falling. Last year, there was nine and a half million babies born. That was a fall, as I mentioned, for third year in a row, There's a slight uptick from the year earlier, but overall the population is continuing to shrink. And the problem with this is that when you have an aging population, you do not have the labour force in order to replace these workers.

[Liana Byrne]

So how do you qualify for this and who's entitled to it? I suppose you just have a kid, do you?

[Katie Silver]

Pretty much. So under the scheme, basically the government said that they're going to get $500 a year for each child under the age of three and they're predicting that's going to benefit about 20 million families. Now they're applying it retroactively. So even if you had the child earlier this year, you will still get it. And families that had children in the last couple of years are also going to be able to apply for partial subsidies.

[Liana Byrne]

The thing is, it's not cheap to have a child in China, is it? No.

[Katie Silver]

So according to research there, they found that China is actually among one of the world's most expensive places to have children in relative terms. So to give you an ide, raising a child there to the age of 17 costs on average about $75,700.

[Liana Byrne]

And also because of that one child policy, I'm sure culturally people don't necessarily want to have more than one child.

[Katie Silver]

What it did was it embedded these cultural norms. There's also other factors like rural urban migration, so many people having to leave the place where their parents live and live in cities and therefore not get that help from grandparents. And the other element as well is that East Asia, many women, very educated, but there's still the cultural expectation that they're going to help and support both aging parents and aging in laws and do the lion's share when it comes to things like childcare and all of that, of course, disincentivises procreations.

[Liana Byrne]

Okay, the BBC's Katie Silver, thank you so much for joining us on Marketplace.

[Katie Silver]

Thanks, Leanna.

[Liana Byrne]

All right, let's to the numbers. AstraZeneca has beaten second quarter profit forecasts thanks to strong sales of cancer, heart and kidney drugs and booming demand in the US where it's investing $50 billion to expand. Meanwhile, Stellantis, the carmaker behind Fiat and Peugeot, says U.S. import tariffs will cost at $1.7 billion this year. The company reported a $2.6 billion net loss for the first half as shipments to North America dropped nearly a quarter. Now there's a new threat to an 81 year old water treaty between the US and Mexico. It covers two major rivers, the Rio Grande and the Colorado River. Under the treaty, Mexico sends enough water to fill 170,000 Olympic sized swimming the US every year and even gets more back. But northern Mexico is in the middle of a severe drought and the country is falling behind on deliveries. The Trump administration isn't happy. The BBC's will grant reports.

[Will Grant]

After 30 consecutive months without rain, the townsfolk of San Francisco, the Conchos, gather to plead for divine intervention on the shores of Lake Toronto. At the reservoir behind Chihuahua state's most important dam called La Boquilla, farmers on horseback and their families pray for a very wet rainy season. So far they've had no sign of one. From its high water mark, the Lake has lost 26.5 meters of depth. It's now at less than 14% of its capacity. In the congregation is Rafael Betanze, who has monitored La Boquilla for the state water authority for 35 years. Few know the lake's fluctuations as well as Mr. Bethanse. And as we head out on the reservoir for a closer look, he says he's never seen the situation get this dire. It's impossible. We are not able to water crops. You can see that the dam lies idle. There's no hydroelectric power being generated and we can't use any water for agriculture. They're just decent enough. Despite the meager supply in Chihuahua, Mexico must abide by the Terms of a 1944 water sharing treaty with the United States. Under the agreement, Mexico must send water from the Rio Grande to Texas. In return, the US sends its own much larger allocation from the Colorado river to supply the Mexican border cities of Tijuana and Mexicali. Mexico is in arrears and has been for much of the 21st century. In April, on his Truth Social site, President Trump accused Mexico of stealing the water and threatened tariffs and maybe sanctions unless Mexico sends Texas what it owes. The thing is, the complaints from Texas are valid, but people here on the Mexican side say you simply can't take from what isn't there. People in these communities feel trapped by the terms of what they consider to be an outbreak dated agreement, which doesn't account for the ravages of climate change.

[Will Markham]

So this is my corn. It's about a week, 10 days off from being ready to harvest.

[Will Grant]

Brian Jones, a fourth generation farmer in the Rio Grande Valley in Texas for.

[Will Markham]

The last three years, I've only been able to plant half my farm because I don't have enough irrigation water. We feel that Mexico has not been living up to their part of the treaty.

[Will Grant]

The cross border arguments go beyond just water. Scarcity, they're also about agricultural methods and efficiency. Walnut trees need, on average 250 litres a day. Traditionally, Mexican farmers simply flood their fields with water from the irrigation channel.

[Katie Silver]

Senor Padre Santo que mandasna lombre queuard.

[Will Grant]

As bad as the crippling drought has been for farming, the problems extend even further. The reservoir's critically low level means the little water in it is overheating, killing the lake's marine life, and with it, a once thriving tourism industry. In the face of such a litany of problems, the community around the Rio Conchos can do little besides bow their heads and pray. The rain falls sometime soon in Mexico. I'm the BBC's Will Grant for Marketplace.

[Liana Byrne]

And I'm Liana Byrne with the Marketplace Morning Report from the BBC World Service.

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Marketplace listeners know that voice.

[Kai Rysdal]

I'm Kai Rysdal from Marketplace. Let's do the numbers.

[N/A]

This August marks 20 years of Kai Ryssdal as a trusted voice in economic news, from interviews with sitting presidents.

[Will Markham]

Mr. President, good to talk to you again, sir.

[Will Grant]

Great to be here.

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To conversations at local trampoline parks.

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The thing that makes the high concentration of trampoline parks here in Utah County a relevant economic indicator, though it's what it tells you about how demographics affect the economy.

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