China’s Population Declines for Fourth Year Despite New Birth Incentives

China is facing an intensifying demographic challenge. New official data shows that China’s population declined again in 2025, marking the fourth straight year of contraction, even as the government rolled out financial incentives and policy measures to encourage families to have more children.

Why in News?

China’’ population declined by 3 million in 2025. Births fell to a record low despite new child-rearing incentives.

Population Decline and Birth Trends

• According to official statistics, China’s total population stood at about 1.404 billion in 2025, nearly 3 million lower than the previous year.
• The number of babies born dropped sharply to 7.92 million, a fall of 1.62 million or 17 percent compared to 2024.
• This also marked the lowest birth rate ever recorded, at 5.63 births per 1,000 people.
• The brief rise in births seen in 2024 failed to continue, reinforcing a long-term downward trend that has persisted for several years.

Fertility Rate and Long-Term Demographic Pressure

• China’s fertility rate has fallen far below the replacement level.
• While the last official figure in 2020 stood at 1.3, experts now estimate it to be close to 1, much lower than the 2.1 needed to maintain population size.
• Rising living costs, intense work culture, expensive education, and housing pressures have discouraged young couples from having children.
• These challenges have been aggravated by economic slowdown, shrinking job security, and uncertainty about future incomes, making parenthood a less attractive choice for many families.

Policy Shifts and Incentives After One Child Era

• After decades of strict population control, China relaxed its family planning rules by allowing two children in 2015 and three children in 2021.
• In 2025, the government announced cash subsidies of 3,600 yuan per child to encourage births.
• Additional measures included tax exemptions for kindergartens, daycares, and matchmaking services.
• However, results have remained limited. At the same time, contraceptives like condoms were removed from tax exemption lists and became subject to a 13 percent value added tax, reflecting a mixed policy approach toward influencing family behaviour.

Key Summary at a Glance

Question

Q1. China’s fertility rate is well below the replacement level of:

A. 1.5
B. 1.8
C. 2.1
D. 2.5