A decade after ending its longstanding one-child policy, China is trying a variety of measures to encourage more births, from cash subsidies to taxing condoms, and even eliminating taxes on matchmakers and day care centres. Yet the latest population figures suggest these efforts are still falling short.

China’s population of 1.404 billion in 2025 is 3 million fewer than the previous year, marking the fourth consecutive annual decline. The nation’s birth rate, at 5.63 births per 1,000 people, is the lowest since 1949, the year Mao Zedong’s Communists overthrew the Nationalists and began ruling China. Pre-1949 figures under the Nationalist government are unavailable.

Once the world’s most populous nation, China was overtaken by India in 2023. The new statistics highlight the deep demographic challenges facing the country as it struggles to “get old before it gets rich,” balancing a growing, yet ageing, population with economic ambitions.

Fewer babies, rising concerns

Only 7.92 million babies were born in 2025, a decline of 1.62 million, or 17%, from the previous year. While there was a slight uptick in 2024, it was not sustained, continuing a long-term trend: births had declined for seven straight years through 2023.

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Many families cite the high cost and pressure of raising children in a competitive society as barriers, particularly in an economic downturn. Another cultural factor may have played a role: 2025 was the Year of the Snake, considered an unlucky year for having children under the Chinese zodiac.

A falling fertility rate

Like other Asian nations, China’s fertility rate, the average number of children a woman is expected to have, has fallen sharply. The government last reported it as 1.3 in 2020, while experts now estimate it around 1, far below the 2.1 replacement rate needed to maintain population size.

Decades of the one-child policy created generations of only children. In 2015, the government increased the limit to two children, and in 2021, further raised it to three to address demographic pressures.

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Economic pressures drive policy

China now has 323 million people over 60, or 23% of the population, while the working-age population shrinks. Fewer workers supporting a growing elderly population creates economic strain, especially as China seeks to transition from labour-intensive farming and manufacturing into a high-tech, consumer-driven economy.

Policy incentives have had limited success. In July 2025, the government announced cash subsidies of 3,600 yuan ($500) per child. Meanwhile, to influence behaviour further, officials also began taxing condoms by removing them from a value-added tax exemption list, imposing a 13% tax starting January 1, 2026.

To encourage child-rearing, kindergartens, daycares, and matchmaking services have been added to the tax-exemption list.

Despite these moves, China’s population continues to shrink, and the country faces mounting pressure to find a sustainable path forward, balancing economic growth with an ageing, declining population.