In 2025, China will record one of its lowest birth rates on record, as the country's population shrank for the fourth straight year. This deepens a demographic challenge that could hamper the world's second-largest economy in the coming decades, according to an analysis by CNN.
China's National Bureau of Statistics reported that the rate fell to 5.63 births per 1,000 people last year. The decline suggests that the slight rise in birth rates in 2024 is more of an aberration than a reversal of the otherwise steady decline since 2016.
China's economy grew 5% in 2025, in line with the government's annual target of "around 5%".
The annual expansion was supported by a surge in Chinese exports, which offset trade tensions with the United States and weak domestic consumption. China ran a record trade surplus of $1.2 trillion last year despite US President Donald Trump's recurring trade war.
However, the data also showed the economy slowing in the fourth quarter of 2025, with the country registering just 4.5% growth from a year earlier - the slowest quarterly increase since late 2022.
Officials hailed the economy's "remarkable stability", with statistics bureau chief Kang Yi saying it was achieved despite a "complex and difficult situation marked by rapid changes in the external environment and growing internal challenges".
Despite the annual economic growth target, the birth rate figures are a blow to Beijing's efforts to reverse the impact of decades of strict, state-imposed birth controls under the now-abandoned "one-child" policy. and to persuade more young people to have children.
According to data, China's total population fell by 3.39 million last year. The country's population is expected to reach 1.4 billion by 2025.
China's demographic challenge
China's changing demographics are seen as a serious challenge by the authorities, as the country's workforce shrinks and the retirement age population grows. In 2025, the number of people over 60 reached 323 million, accounting for 23% of the population, up one percentage point from 2024.
Years of strict population control with the "one-child" policy, which was lifted in 2016, have accelerated trends seen in other countries such as Japan and South Korea, where declining birth rates have been the result of rising education levels, changing views on marriage, rapid urbanization and higher child-rearing costs.
According to United Nations projections, by 2100 half of China's population could be over 60 - a reality with potentially long-term consequences not only for China's economy but also for its ambitions to rival the United States as a military power.
Chinese President Xi Jinping has stressed the need to "population security" and made "developing a high-quality population" a national priority. He has also led efforts to automate and modernize the country's manufacturing giant, replacing human labor with robotics.
Last year, China's central government began offering annual cash bonuses to families with children under three, revised rules to streamline marriage registration, and launched a free state preschool program.
These measures add to a range of incentives that local governments have tried in recent years to boost birth rates, from tax breaks and financial assistance for buying and renting homes to cash benefits and extended maternity leave.
Analysts expect more policies or incentives to support birth rates and marriage this year. But many believe it will be impossible to stop the decline, especially as young people struggle to find jobs and cope with the high cost of raising children, while women say the unequal burden of raising children discourages them from starting or expanding families.
Fewer babies could also have a more immediate economic impact. "Children are "super consumers". With such low birth rates, domestic demand in China is likely to remain weak, leaving the economy increasingly dependent on exports," said Yi Fuxian, a demographic expert and senior scholar at the University of Wisconsin-Madison in the US.
China's economic growth
China's 5% GDP growth target shows the resilience of its economy in a year in which tariffs on Chinese imports to the United States briefly reached triple digits.
But analysts say the growth masks deeper challenges to the domestic economy that policymakers are under pressure to address next year.
Expansion slowed to 4.5% in the fourth quarter of 2025, the slowest pace since the economy reopened after the Covid-19 pandemic. The figure was slightly above the 4.4% forecast by analysts polled by Reuters, allowing the data to hit the 5% growth target in a year in which economic growth started strongly and lost momentum.
But while Beijing seeks to project an image of resilience, economists remain concerned about weak household spending amid deflationary pressures and an overreliance on exports to drive growth - especially at a time when governments around the world have become more concerned about widening trade imbalances.
Chinese manufacturers and exporters have pivoted in 2025 to push their goods deeper into markets around the world, including Southeast Asia, Africa and Latin America, as their penetration of the U.S. market has come under pressure from Trump's tariffs. These tariffs are now 20%, imposed on top of existing tariffs after a trade truce was reached late last year.
Despite strong export-led momentum in the first half of 2025, the economy has slowed in recent months, weighed down by weak consumption growth, falling investment and a sharp drop in industrial profits.
In December, retail sales rose by just 0.9% compared with a 1.3% increase in November, underscoring weakness in consumer spending.
Over the year, investment in housing, manufacturing and infrastructure slowed to a historic low, contracting by 3.8%, according to data released today, January 19 - the first annual decline on record. Within this, real estate development decreased by 17.2% amid the ongoing decline in the real estate sector.
But according to analysts at the Economist Intelligence Unit, the positives for the Chinese economy were "strong investment in artificial intelligence and technology and active activity in financial markets".
What's next?
Beijing is expected to set its growth target in March, when China's legislature convenes. The government will also present its next five-year economic plan, which will guide the country's development strategy and policy priorities.
However, according to the OECD forecast made in December last year, China's economic growth will weaken to 4.4% in 2026 and 4.3% in 2027, while the IMF predicts growth of 4.5% for next year.
There are also questions about the accuracy of China's GDP data, which some analysts say are inflated to hide much lower growth. In a report published last month, analysts at Rhodium Group said China's GDP actually grew between 2.5% and 3% in 2025.