China Faces Demographic Crisis as Marriage and Birth Rates Decline

China is facing a pivotal demographic challenge, with a historic decline in marriage and birth rates compelling the government to devise new strategies to counteract population decrease. In the mountainous city of Bangjiahua, wedding celebrations have evolved from social events into official initiatives aimed at encouraging young people to marry and have children, suggesting that these personal choices have transformed into a form of "national mission."

After decades of the one-child policy, which penalized families for having more than one child, Beijing now struggles to persuade young people to have even one child. The number of marriages has plummeted by 21%, reaching an all-time low, exacerbating the crisis as most newborns in China are born within marriage.

In January 2025, the government reported a population decline for the third consecutive year, projecting a stagnation at approximately 1.408 billion by the end of 2024, a decrease of 1.39 million from the previous year. This places China among nations experiencing sustained population decline, such as Japan and several Eastern European countries, after losing its title as the world's most populous country to India in 2023.

Second Lowest Birth Rate Since 1949

Despite the Year of the Dragon historically being a favored time for births, China recorded its second lowest birth rate since 1949. Official statistics also highlight an aging population, a shrinking workforce, and a potential decline in the worker-to-elderly ratio from 4:1 to 2:1 in a few years, posing significant pressure on economic growth, social systems, and production capacity.

Efforts to boost birth rates through incentive packages have not yielded the desired results. In Bangjiahua, a monthly subsidy of 500 Yuan for families with a second or third child led to a temporary increase in births, which quickly reverted. Interestingly, local consumption surged faster than the national average, indicating that support measures stimulated consumption rather than birth rates.

In 2025, Beijing announced a national support program providing $500 annually for each child under three, a significant move reflecting official concern over the worsening crisis. However, a report from the Yuwa Foundation reveals a more complex reality: the cost of raising a child in China amounts to 538,000 Yuan, over six times the average annual income per person.

Is the Economy Approaching a "Point of No Return"?

These indicators raise fundamental questions about the future of the Chinese economy. With an aging population, declining workforce, and rising living costs, experts warn that China faces structural challenges that cannot be resolved solely through financial incentives. Economists stress that deeper reforms are necessary, addressing labor markets, housing policies, social security, and education costs.

A demographic crisis of this magnitude could reshape the structure of the Chinese economy for decades to come and define its influence and growth potential on the global stage.