Demographers have questioned if Gansu province's proposed subsidy to a rural couple who gave up having a second child is consistent with the national family policy.
China has abolished its decades-long one-child policy, allowing all couples to have two children as the country faces an aging society, low fertility rate and a shortage of labor.
But a modified population and family planning policy in Northwest China's Gansu, one of the country's least developed regions, said rural couples who meet qualifications to have two children but decide to give up their choice would receive a one-off reward of 1,000 yuan ($150).
Huang Wenzheng, an expert in population studies, said the province's policy stimulus goes against the national policy aimed to promote sustainable growth and affects implementation of the two-child policy.
It's an example of the wrong, entrenched opinion that it is better to have fewer people, Huang added.
Gansu had more than 3.65 million people at or above 65 years old in 2015, accounting for 13.69 percent of the province's total population. It also has a low fertility rate of 1.28 births per woman, far lower than the replacement fertility rate of 2.1 births.
Gansu is not alone in encouraging families to have only one child. Yanta district in Xi'an, capital of Northwest China's Shaanxi province, distributed 240,000 yuan to 198 women who gave up on having a second child before August 2014.
Demographer He Yafa said the regional government's population policy is sending the wrong signal and hinders the nation's goal of balanced population growth over the long term.