China's growth tested by low birth rates

China's birth rate has continued to fall to a seven-decade low last year, despite new policies and incentives rolled out since 2016 to boost births. Last week, the National Bureau of Statistics released new data that showed there were 7.52 babies for every 1,000 people or 10.6 million births in total last year - 1.4 million fewer than in 2020. Indeed, the country's population growth has slowed for five consecutive years and, with deaths nearing the number of births, at 10.1 million last year, it will not be too long before the population starts to shrink. The fertility rate is 1.3, way below the replacement rate of 2.1.

This must be worrisome for the Chinese government, which in 2016 ended the more than three-decade-old one-child policy to allow couples to have two children, to little effect. This policy was revised again last year as birth rates fell to a 43-year low the year before, to allow couples to have three children. Local governments have rolled out incentives to encourage couples to have more children. While maternity leave under national law is 98 days, more than 20 provinces are increasing such leave, with Henan and Hainan granting as many as 190 days of leave after childbirth, and Beijing and Shanghai, 158 days. Some are granting loans to couples with children while others are providing housing subsidies.