A local Chinese government has backtracked on its promise to reward parents who have a third child with cash handouts, potentially thwarting one effort by the world’s second-largest economy to boost its birthrate.

Zhengzhou authorities pledged to give handouts of up to 15,000 yuan ($2,097) to parents of more than two children starting September. Residents say the indebted local government has since turned down their subsidy applications, according to a Thursday report by a news outlet overseen by the official Henan Daily.

A city health commission official cited funding as a factor in the policy’s delayed implementation, according to the report. The commission posted a statement on its official WeChat account Thursday morning vowing to implement the measure as soon as it was finalized.

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The topic had attracted over 50 million views on China’s microblogging platform Weibo on Thursday morning, with some questioning the credibility of the local government. “The problem is there’s no more money,” one Weibo user wrote, in a post that gained over 500 likes.

While Henan is one of China’s most populous provinces, its deaths exceeded births for the first time since 1961 last year, according to the provincial statistics bureau. That came as China’s overall population started shrinking in 2022, for the first time in six decades.

Cities across China have been rolling out measures to encourage citizens to have more children. Incentives include providing longer maternity leave, expanding medical insurance coverage and offering greater access to assisted reproductive services.

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Such policies will cost local authorities money at a time when many are under fiscal strain. Henan province has one of the highest debt burdens in China, with its direct and so-called hidden debt burden surpassing 300% of total fiscal revenue, Moody’s Investors Services said in August.

Zhengzhou, a city with one of Henan’s worst debt burdens, has been marred by scandals in recent years, including China’s biggest bank scam that prompted protests by depositors.

--With assistance from Jing Zhao.