Why is China asking its youth to get married and have more children?

Young Chinese are increasingly hesitant to walk down the aisle, and that’s ringing alarm bells in Beijing.

After all, tying the knot ceases to be just another private matter when the number of young people postponing the decision to start a family is as stratospheric as in the case of China.

Chinese men and women contracted 1.9 million marriages in January-March, down 8.2 percent from a year ago.

Analysts say the economic cost of Chinese couples putting off marriage and having children is so high that it threatens to upend decades of rapid growth, which has turned the country of 1.4 billion people into the second-largest economy in the world within a short span of time.

A fall in the number of marriages means fewer babies, reduced consumption, a shrinking labour force and an ageing population living on pensions.

Having children out of wedlock is relatively uncommon in China, partly because of social stigma and government regulations that make it difficult for unmarried people to access public services like education and healthcare for their offspring.

“The demographic dividend has been one of the most influential factors in China's economic development,” says Gary Ng, senior economist for Asia Pacific at Hong Kong-based Natixis Corporate and Investment Banking.

A labour-intensive manufacturing sector turbo-charged China’s rise from an economic wasteland until the early 1980s to an industrial juggernaut expected to unseat the United States as the world’s biggest economy within the next 10 years.

Gary tells TRT World that the working-age population has so far kept China’s manufacturing sector competitive, with rapidly growing consumption and rising incomes.

However, the same demographic dividend may become a liability if Chinese couples continue to reject matrimony.

Official data shows Chinese couples have been shying away from taking the plunge for many years now. In absolute terms, the drop in the number of marriages contracted every year in China has gone down more than 40 percent since 2013.

The only exception in an otherwise steady decline in the number of marriages a year in recent times was 2023. COVID-related lockdowns and bad economic conditions in China resulted in too few marriages in 2022, which led to a year-on-year increase in the subsequent year.

But the resumption of the downward trend in the first three months of 2024 can be indicative of a return to the “norm” after the post-Covid bump, Gary adds.

“It is costly to get married in China,” he says, adding that the economic downturn as well as higher living expenses have deterred more couples from settling down.

“Even if the couples do get married, it is likely that most families will have fewer children than before,” he said.

Data from China’s National Bureau of Statistics show that the country’s birth rate, which reflects the number of live births per thousand people every year, has dropped by more than half in the last ten years to 6.39.

As a result, China’s population has shrunk for two straight years, a first in over six decades.

“The one-child policy has a prolonged impact on increasing the stress of young couples on the support of their elderly parents,” Gary says, referring to the state policy that barred couples for 36 years from having more than one child.

The country reversed this policy in 2016 and is now actually encouraging citizens to have as many as three children, thanks to a surging “old dependency ratio” that’s putting the economic future of the $18 trillion economy at risk.

Data shows that the old dependency ratio in China currently stands at an all-time high of 22.5 percent, reflecting the number of economically inactive elderly people as a percentage of the working-age population.

This has serious implications for the Chinese economy as it imposes “continued pressure on the long-term balanced development” of the population in the future.

For instance, the number of retirees in China is likely to outstrip the number of working people in the next 25 years. “By 2050, half of China's population will be above 64, rising from 21 percent in 2023,” says Gary, highlighting the disproportionate fiscal burden of pensions that Chinese taxpayers will have to bear in the coming years.

The pension system in China has three tiers. The first tier—or “pillar”—is supported by government contributions and tax revenues. The second pillar consists of voluntary employee pension plans offered by employers. The third and last pillar is made of private voluntary pension schemes that people use to set aside their own money for post-retirement years.

As the second and third pillars remain “underdeveloped”, the state-backed pension system continues to rely on heavy state subsidies to stay afloat.

“China's main pension fund may be exhausted by 2035 without subsidy and reform,” Gary adds.

Only six of the 23 provinces in China manage positive cash flows in pension funds while the rest depend on subsidies transferred by the central government, he adds.

“As China’s population has peaked, the decline in the marriage rate will further exacerbate the pressure of a lower fertility rate.”