A doctor holding a newborn baby Photo: VCG

 
Boosted by the nationwide childcare subsidy program introduced on Monday, stocks in sectors such as dairy, childcare-related products, and relevant services surged on Tuesday, with further growth potential expected thanks to the strong policy support.

A-share listed company Beingmate Co closed at 6.72 yuan ($0.94) per share on Tuesday, up 3.54 percent, and Jiangxi Sunshine Dairy Co rose by 9.98 percent to close at 14.99 yuan. Kidswant Children Products Co edged up 2.24 percent to 13.69 yuan, while Shanghai Aiyingshi Co gained 2.62 percent to 20.74 yuan. 

As for Hong Kong-listed firms, China Parenting Network Holdings closed on a 100 percent surge on Tuesday.

China on Monday introduced a nationwide childcare subsidy program starting in 2025. The program will offer families 3,600 yuan per year for each child under the age of three. The subsidies will be exempt from individual income tax and will not be counted as household or individual income when identifying assistance recipients, such as those receiving subsistence allowances or classified as living in extreme difficulty. The policy is expected to benefit more than 20 million families each year, the Xinhua News Agency reported on Monday. 

The policy seeks to increase birth rates, fostering economic and consumption growth, with positive impacts on sectors such as dairy, infant products, and primary and secondary education, Yang Delong, chief economist at Shenzhen-based First Seafront Fund, told the Global Times on Tuesday.

A CITIC Securities research report released on Tuesday highlighted that infant formula is closely linked to childcare policies. Effective childcare subsidies directly boost demand for infant formula, while strong downstream dairy demand supports the upstream raw milk supply-demand balance, positioning the dairy sector as the primary beneficiary of childcare subsidies, according to the report.

Maternal and infant retail activity also benefits from subsidies, with rising fertility rates improving store sales. Infant product companies are expected to gain from expanded user bases due to higher birth rates, as policies like childcare subsidies would enhance the willingness to have children, positively affecting postpartum care, propelling growth in these sectors, per the report.

Wang Peng, an associate research fellow at the Beijing Academy of Social Sciences, told the Global Times on Tuesday that childcare subsidies directly increase household disposable incomes, boosting demand for maternal and infant products, driving industry expansion and product upgrades.

In addition, the policies will also stimulate early education and interest-based training, potentially fostering growth in vocational and higher education, according to Wang.

With an annual subsidy of 3,600 yuan per child, approximately 101.2 billion yuan could be disbursed yearly, potentially unlocking more than 100 billion yuan in annual consumption growth, Yang Chang, chief analyst of Zhongtai Securities' policy team, told the National Business Daily, a Chinese business news publication.