Part 3/12:
However, critics and affected families have pushed back, pointing out that the money has already been spent on essentials like baby formula and diapers. The underlying truth appears to be more troubling: local governments, including Shanghai’s, are financially strapped. Several years ago, to encourage larger families, local authorities distributed subsidies for second children. But on January 1st this year, the central government introduced a nationwide child care allowance for children under three, ostensibly replacing local support programs. Many local governments, including Shanghai, responded by abruptly halting their own subsidies under the pretext that the central program had merged with local grants.