China has unveiled an ambitious strategy to create what it calls a “childbirth-friendly society” over the next five years, as policymakers confront a demographic slowdown that economists warn could reshape the country’s economic trajectory.

The proposal, outlined in an official government report released during the annual meeting of the National People’s Congress, lays out a sweeping set of social and financial policies aimed at reversing declining birth rates and stabilizing the country’s shrinking population.

For Beijing, the demographic challenge is no longer a distant concern. Population decline, rapid ageing, and a shrinking workforce are now central issues shaping the government’s long-term economic planning.

Authorities said the new strategy would focus on improving employment prospects, expanding access to education and healthcare, raising incomes, and strengthening social security in order to encourage couples to marry and have children. Officials also pledged to promote “positive attitudes toward marriage and childbearing,” while expanding housing support for families with children and improving population services nationwide.

The urgency of the policy shift reflects a stark demographic reality.

Official statistics released earlier this year showed that China’s population fell for the fourth consecutive year in 2025, while the birth rate dropped to its lowest level on record.

China’s population has been shrinking since 2022, marking a dramatic reversal for the world’s second-largest economy, which for decades relied on abundant labor to fuel industrial expansion and rapid economic growth. Demographers say the country’s fertility rate is now well below the replacement level of 2.1 births per woman, meaning the population will continue to shrink without sustained immigration or a significant rise in births.

For policymakers, the implications stretch far beyond demographics. A smaller population could weaken consumption, shrink the labor force, slow productivity gains, and place a growing strain on pension systems. The trend also complicates Beijing’s broader efforts to rebalance the economy toward domestic demand.

Massive financial support for families

To address the problem, the government is preparing a large-scale support programme aimed at reducing the financial burden of raising children. According to Reuters estimates, Beijing could spend around 180 billion yuan ($25.8 billion) this year on policies designed to boost births.

A key component of the initiative is a national child subsidy programme introduced last year, marking the first time the central government has offered direct financial support to families raising children across the country. Officials are also planning to eliminate medical costs associated with pregnancy beginning in 2026.

Under the new policy, women will face no out-of-pocket expenses during pregnancy, with all medical costs — including fertility treatments such as in vitro fertilization — fully reimbursed through the national health insurance system. Authorities say the move is designed to address one of the biggest barriers to childbirth: the rising cost of healthcare and fertility treatments. At the same time, the government will expand subsidized childcare services and continue implementing childcare subsidy systems across the country.

Pilot projects for affordable childcare facilities will also be expanded, particularly in urban areas where limited childcare options have discouraged many couples from having more children.

Tackling education costs and family pressure

Education costs have also become a major factor in China’s declining fertility rate. Many urban families cite the intense competition for schooling and the high cost of tutoring and education as reasons for limiting family size. The government report said China would refine policies on free preschool education and increase the number of places available in senior secondary schools.

Public spending on education will remain above 4% of GDP, officials said, signaling continued government investment in the sector. Improving education access is intended not only to reduce financial pressure on families but also to ease anxieties about children’s future opportunities.

The government also pledged to strengthen maternal healthcare and reproductive services. Officials said services for women during early pregnancy will be expanded, while reproductive health programmes will be improved nationwide. Efforts will also focus on improving screening and treatment for birth defects and enhancing medical services related to fertility and childbirth.

These measures aim to increase confidence among prospective parents while addressing health risks that may discourage couples from having children.

The rise of the “silver economy”

Even as Beijing works to increase birth rates, the government is simultaneously preparing for the reality of an ageing society. China’s population over the age of 60 is expected to grow rapidly in the coming decades, creating new economic and social challenges.

Officials said the government would promote the development of the so-called “silver economy,” referring to industries and services designed for older citizens. Policies will focus on expanding elderly care services, especially in rural areas where healthcare infrastructure is often limited.

Authorities will also introduce new financial services aimed at seniors, including pension finance, healthcare services, and wellness programmes.

The demographic shift is becoming an existential threat. By 2035, the number of people aged 60 and above in China is projected to reach around 400 million — roughly equivalent to the combined populations of the United States and Italy.

An ageing population presents serious fiscal and economic challenges. As more citizens retire, pension systems will face increasing pressure while the working-age population shrinks.

That imbalance could slow economic growth and reduce government revenue, making it harder to fund social services and infrastructure investments. In response, Beijing has already begun adjusting retirement policies.

The government recently increased retirement ages gradually, with men expected to retire at 63 instead of 60, and women at 58 instead of 55. The change is intended to keep more people in the workforce for longer and reduce pressure on pension funds.

However, economists say retirement reforms alone will not solve the demographic problem if birth rates remain low.

Long-term economic implications

China’s demographic transition is expected to have far-reaching implications for the global economy.

For decades, the country’s massive workforce supported its rise as the world’s manufacturing hub. A shrinking labor force could increase wage pressures and push companies to accelerate automation. It may also influence global supply chains, as manufacturers reassess production strategies in response to rising labor costs.

At the same time, slower population growth could weigh on consumer demand, affecting sectors ranging from housing to education and healthcare. Analysts say the government’s push for a “childbirth-friendly society” represents a recognition that demographic stability is now a central pillar of China’s economic strategy.

Yet reversing fertility trends may prove difficult.

Countries including Japan and South Korea have implemented generous pro-natalist policies for years with limited success, highlighting the complexity of changing social and economic behavior. Against that backdrop, the Chinese leadership now faces the challenge to balance short-term economic priorities with long-term demographic realities as it seeks to sustain growth in the decades ahead.