A sage mind came up with the words ‘There are two types of predictions: a wrong one, and a lucky one.’ A statement like that often feels hard at odds with the way many in western media talk about China. From hawk to dove, coverage of China seems to handle prediction with greater indulgence than would ever be granted other countries.
I guess it’s a hangover from the days of closed-door communism – North Korea and its regime’s stability is the only other subject where political talk lapses so effortlessly into speculation. Opaque government leaves much to be guessed. But we see it beyond politics too. In the construction bubble, the AI race, and, lately, in talk of China’s declining birth rate.
In January it was announced that China’s birthrate hit a record low, the lowest, in fact, since the Communist Party took power in 1949. By the end of 2025 China’s population had dropped by 3.39 million to reach 1.4 billion. The news came with familiar tones of systemic collapse.
China’s declining birth rate challenges
China’s chief problem isn’t that fewer babies are being born. It’s that it is happening before the country has fully developed. Traditionally, development follows a fairly straight path – one driven by the young. They lift themselves up, contribute to a strong tax base which in turn covers pensions and welfare. Then society ages and fertility falls.
To China’s challenges, we can add youth disenfranchisement over long working hours and traditional career goals, a rising cost of housing – especially in megacities – and education. There’s also the question of immigration. China, for now at least, seems closed to the idea of importing workers from other parts of the world.
And the opportunities
Since scrapping the one-child policy, the Chinese government has been throwing curveballs at the problem. A few years back they cracked down on extra-curricular schooling to try and keep costs of educating a child within reasonable limits. At the start of this year, they introduced a condom tax to the dismay of many Chinese. Also, to much dismay, a policy was rolled out in Beijing that allowed pensioners to reimburse the costs of prenatal exams…
Nudging the over 60s to pick up the slack in birth-rates is nuts, but it does say something about China’s strengths. It is still at an early stage of decline, and it has the power to shift policy in ways that, say, South Korea or Japan – the poster children for declining birth rates – don’t.
If Beijing has the smarts to treat this as a cost-of-living problem, or one of work life balance, or even gender equity, there’s no reason they can’t pull the right levers to make child-bearing conditions more favourable.
If they don’t, they’re sitting on the brink of a revolution in robotics that might be able to pick up some of the slack. In which case, Beijing should probably not be asking how do we get back to 2.1 children? But how do we run a modern economy where 1.0 is the norm?
How this all matters
China’s falling birth rate is real, and it comes with real consequences. What remains speculative is the leap from demographic pressure to societal collapse. That leap says less about China than it does about a long western habit of treating opaque systems as blank pages for dramatic forecasting, and in its darkest form perhaps even wishful thinking.
Low fertility does not predict revolution, implosion, or decline on a fixed timetable. It predicts constraint and narrowing margins for error. China will be forced into trade-offs, but its future isn’t pinned to the number of babies born each year. The mistake here isn’t concern over demographics but mistaking them for destiny.
