By Yoko Kubota and Liyan Qi | Photographs by Gilles Sabrié for WSJ

TIANMEN, China -- Early last year, this quiet city in central China started offering serious cash incentives for couples to have more children, up to around $13,000 for a second child and $23,000 for a third. Births surged 17% for the full year.

Chinese authorities have held up Tianmen as having produced the kind of baby boom leaders would like to see nationwide. But it isn't clear if the rise was a result of the rich payout or other factors. Some women said the birth incentives had little to do with their thinking on whether to have more children or not.

China's leaders are growing anxious to halt the shrinking and aging in the country's population. This year, child-care subsidies were mentioned for the first time in China's annual government work report. It isn't the only country trying this approach. Places like Japan, South Korea, Hungary and Norway have devoted significant resources to stem declining births; generally, such programs have had little success.

In China, more than two dozen cities have rolled out perks tied to childbirth. What makes Tianmen unusual is the size of the subsidies, money that really can make a difference in a city where the per capita disposable income is $5,300 a year.

Official media described Tianmen's maternity wards as so busy last year that medical staff barely had time to rest during the recent Lunar New Year holidays. More than 100 officials have traveled to the city of one million in Hubei province to learn from its success, one report said.

Revival mode

A visit made it clear that Tianmen is a city in revival mode -- but also that it is far from turning a demographic corner after six years of decline in births.

At the entrance to Tianmen Maternal and Child Health Hospital, a sign said, "More children, more joy," and electronic billboards explained how to apply for the subsidies. Buses advertised a new clinic for IVF treatment. A red propaganda banner warned against waiting too long to have children, proclaiming, "Giving birth early is beneficial. Giving birth late is regrettable."

The total of 7,000-plus babies last year paled compared with the 18,000 births reported in 2017. With young people moving away for work elsewhere, Tianmen's population has become increasingly gray. The portion of people 60 and older jumped to more than 25% in 2020, from 10% in 2010, census data showed.

On a recent weekday, more old people than children were noticeable in the city center. In Duoxiang Township on the city's outskirts, seniors were playing mahjong across the street from a preschool. One resident said another preschool in the area had to close as the number of children dwindled. Colorful fake flowers and gravestones were on sale ahead of the Qingming tomb-sweeping holiday.

Now Tianmen hopes its birth incentives will hit several economic goals at once: get young workers to move back and start families, lift housing purchases and increase overall spending.

Most babies born in 2024 would have been conceived before details of the incentives were announced early last year. Also, the baby boom came after a wave of young workers had returned to the city from having worked in more-expensive cities on the coast, raising the share of would-be parents in the population.

Some women in the city said the birth incentives weren't a decisive factor for them.

"If you want to give birth, you would with or without subsidies," said Katie Wang, who was sitting outside a large Tianmen shopping mall with her 2-year-old son and husband. "If you don't want a child, you won't have one regardless of subsidies," she said.

Wang, 33, had long worked outside of Tianmen, including several years in Beijing. She said one child already occupies a lot of the couple's energy and financial resources and they aren't considering having a second. When her son starts preschool in the fall, she plans to go back to work, possibly leaving Tianmen again for a job in Guangdong province in the south and taking her son with her.

Xie Fei, 38, said she was already six months pregnant with her third child when she learned about the birth incentives from a co-worker. At the time she was working in Wuhan, a bigger city some 90 miles away, but went back to Tianmen to give birth. Apart from a $450 cash reward when her son was born in September, she gets around $140 every month for child-rearing.

Housing subsidy

But the more substantial benefit was help toward buying a home. A month after giving birth, Xie bought an apartment in Tianmen with a nearly $25,000 subsidy that covered about a third of the total costs.

"I'm indeed benefiting from the government subsidies. They helped to relieve the pressure of raising the kids," Xie said. She returned to work in Wuhan, at a state-owned company called China National Chemical Engineering No. 16 Construction, after her six-month maternity leave. But Tianmen is still her hometown under China's household-registration system, and she is considering returning one day. "I feel lucky to be from Tianmen," she said.

Like Tianmen, other cities are also offering housing subsidies tied to births, which could help address a glut of unsold apartments in the wake of China's real-estate bust. Economists say it is also a way for policymakers to encourage spending while avoiding no-strings-attached handouts. "You can see that the local officials are trying to get bang for their buck," said Erica Tay, economist at Maybank.

According to state media, the city has spent around $8 million to encourage births. Since March, Tianmen will also reward newlyweds with a housing subsidy of $8,300 for a new apartment.

With many local governments strapped for cash, some analysts expect the central government to play a primary role in funding fertility-related programs.

China as a whole also saw a welcome rise in births in 2024, much of which fell in the zodiac Year of the Dragon, considered auspicious for births in China. But the population still fell as deaths outnumbered births and demographers saw the baby rebound as temporary.

To keep its mini baby boom going, Tianmen is pushing to bring back more young workers from coastal cities. The approach is in line with Beijing's goals of transferring more factory jobs to inland cities.

According to the official Xinhua News Agency, some 80,000 people returned to Tianmen in 2024. Many come for a cheaper cost of living at a time of economic slowdown.

In several neighborhoods of the city, returnees have taken over empty storefronts to open small garment factories. At one of them, a 41-year-old man surnamed Wang said he moved back to Tianmen in 2023 after some 20 years in Guangzhou. Wang, who has a 16-year-old son, said he had heard about the baby subsidies, but said he doesn't plan on having another child.

--Xiao Xiao contributed to this article.

Write to Yoko Kubota at yoko.kubota@wsj.com and Liyan Qi at Liyan.qi@wsj.com

(END) Dow Jones Newswires

April 09, 2025 23:00 ET (03:00 GMT)

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