China's Population Shrinks for Fourth Year, Births Hit Record Low Despite Incentives

• China's population declined for the fourth consecutive year in 2025, reaching 1.404 billion, a decrease of 3 million from the previous year.
• The number of births in 2025 dropped to a record low of 7.92 million, a 17% decrease, marking the lowest birth rate on record at 5.63 per thousand.
• Demographic pressures are intensifying due to the high cost of raising children in a competitive society and an economic downturn.
• Despite policy shifts from a one-child limit to a three-child policy and new incentives like cash subsidies, birth rates remain well below the 2.1 needed for population maintenance.
• New measures include taxing contraceptives while exempting child-rearing services like kindergartens and daycares from VAT.

Why It Matters: China faces severe demographic challenges as its population shrinks and birth rates plummet despite government incentives.