China’s birth rate fell last year to its lowest level since 1949, highlighting a deepening demographic struggle for Beijing even as officials roll out new subsidies to encourage couples to have more children.
The number of births per 1,000 people dropped to 5.6, the lowest since at least the founding of the People’s Republic, according to data released by the National Statistics Bureau on Monday (Jan. 19). The number of newborns decreased 1.6 million, the most since 2020, to 7.9 million.
The figure is a setback for President Xi Jinping’s campaign to promote a fertility-friendly society including by offering cash rewards for parents. The total population fell by 3.4 million, the sharpest drop since the 1960 Great Famine under former leader Mao Zedong, to 1.405 billion.
A shrinking workforce and aging population are major threats to the world’s second-largest economy. As the elderly cohort grows, the worker-to-retiree ratio shrinks, piling more pressure on the underfunded pension system.
To counter these structural headwinds, the Chinese government has implemented a series of pro-natalist policies in recent years, from extending paternity and maternity leave to making it easier to register a marriage.
Among the incentives, couples are offered about $500 a year for each child born on or after Jan. 1, 2025, until they reach the age of three. Starting this year, the government also imposed a 13% value-added tax on contraceptive drugs and devices, including morning-after pills and condoms.
He Yafu, an independent demographer, said the amount of government subsidies is “too small” to meaningfully lift birth rates.
He attributed the drop to young people’s unwillingness to get married and a decline in the number of women of childbearing age, which fell by 16 million from 2020 to 2025.
This shrinking pool of potential mothers is partly the result of the one-child policy, which hollowed out the demographic base for future growth before being scrapped in 2015.
This story was originally featured on Fortune.com
