Abstract: The first principle of fiscal incentive mechanisms for youth sports is to use fiscal levers to address the imbalance between cost and benefit, which has a positive effect on promoting youth sports participation. Analyzing case studies of the Active and Creative Kids Voucher Program in New South Wales, Australia; the Sports Vouchers Plus in South Australia, Australia; and the federal Children’s Fitness Tax Credit in Canada reveals that while models like targeted subsidies, universal benefit, and tax credits can increase participation rates, they are inherently prone to issues of inequity, inefficiency, and fiscal strain from their inception. Therefore, when designing localized mechanisms, China must address the following challenges: 1) Overcoming regional disparities in sports service provision and establishing a comprehensive county-level coverage system; 2) resolving constraints related to fiscal sustainability and uneven regional burdens by creating a secured budget framework with mechanisms for dynamic adjustment; 3) addressing practical limitations in oversight and implementation costs by developing a digital technology-supported system for beneficiary identification and monitoring. Accordingly, it is recommended that localization efforts adopt a “differentiated urban-rural strategy” to tackle equity issues, implement a “graded and dynamic framework” to ensure sustainability and inclusivity, and leverage “digital empowerment” to enhance the mechanism’s effectiveness and accessibility.