China is confronting a deepening demographic crisis, with its birth rate falling to the lowest level ever recorded, despite a decade of policy reversals and new incentives designed to boost family size.
Persistent Population Decline Defies Policy Efforts
New official figures released on Monday reveal the world's second-most populous nation has seen its headcount drop for the fourth year in a row. The total population stood at 1.404 billion in 2025, a decrease of 3 million from the previous year.
The statistics paint a stark picture of the challenge. The number of newborn babies registered in 2025 was just 7.92 million, a sharp decline of 1.62 million or 17%. This confirms that a minor uptick in births during 2024 was merely a temporary fluctuation, not a reversal of the long-term downward trend that has persisted for years.
Economic Realities Outweigh Government Incentives
Authorities have rolled out a series of measures to encourage more births since scrapping the one-child policy. The limit was raised to two children in 2015 and then to three in 2021. More recently, the government introduced direct cash subsidies of 3,600 yuan (£400/$500) per child to families.
In a more controversial move, the state has also sought to discourage contraception. In 2025, China removed condoms and other contraceptives from a value-added tax exemption list, slapping them with a 13% tax that took effect on 1 January. Concurrently, to promote family formation and support, services like kindergartens, daycares, and matchmaking have been added to the tax-exempt list.
However, these policies have failed to convince most families. The overwhelming feedback cites the immense financial pressure and high costs of raising a child in China's intensely competitive society. These burdens feel even heavier amidst a current economic downturn that has squeezed household budgets.
A Fertility Rate Far Below Replacement Level
Like several of its Asian neighbours, China is grappling with a plummeting fertility rate. The government last officially reported a rate of 1.3 in 2020, and experts now estimate it has fallen to roughly 1.0. Both figures are far below the 2.1 rate required to maintain a stable population size without immigration.
This sustained decline has had a monumental global impact. After decades as the world's most populous country, China was officially surpassed by its regional neighbour, India, in 2023.
The data underscores a fundamental mismatch between top-down policy initiatives and the daily economic realities facing young Chinese couples. Without addressing the core issues of childcare affordability, work-life balance, and living costs, the demographic slide appears set to continue.
