What's Happening?
China's birth rate has fallen to its lowest level on record, with a 17% year-over-year decrease in 2025, according to official government data. This decline is attributed to the long-term effects of the one-child
policy, which was in place from 1979 to 2015. The policy, which included forced abortions and sterilizations, has resulted in a significant gender imbalance and a population decline. Despite lifting the child cap in 2015 and abolishing it in 2021, China's population continues to fall, with India surpassing it as the world's most populous country in 2023. The Chinese government has recently ended a value-added tax exemption for contraceptives in an attempt to boost the birth rate, but it remains uncertain if this will have the desired effect.
Why It's Important?
The declining birth rate in China has significant implications for its future economic and social stability. A shrinking population can lead to a reduced labor force, impacting economic growth and increasing the burden on social services as the population ages. The gender imbalance, a result of the one-child policy, complicates social dynamics and family structures, potentially leading to increased social unrest. Additionally, the policy's legacy affects China's military strategies, as potential casualties in conflicts like a Taiwan invasion could devastate families with only one child. The government's recent tax policy changes may not be sufficient to reverse these trends, highlighting the challenges of reversing decades of demographic engineering.
What's Next?
China may need to implement more comprehensive policies to address its demographic challenges, such as offering incentives for larger families or improving support for child-rearing. The government might also need to address the social and economic factors that discourage young people from having more children, such as high child-rearing costs and intense societal pressures. Internationally, China's demographic issues could affect its economic competitiveness and geopolitical strategies, particularly in relation to its regional influence and military capabilities.
