Ruo bin

China's birth rate has plummeted to a record low. What is happening to the former 'population giant' now? Are young people shrinking back and unwilling to have children? (Background: The fall of a high-ranking executive in China: addiction to cryptocurrency trading, family destruction, and now reduced to driving a taxi to repay debts.) (Additional context: Chinese state media pessimistically reports on the instability of US stablecoins: Circle's IPO bubble, and potential decoupling due to US debt defaults.) In recent years, China's negative population growth situation has become increasingly severe. Despite efforts to stop the bleeding, various local governments have significantly relaxed marriage registration restrictions, opened up China's two-child policy, and even directly provided cash subsidies to encourage young families to have children, they have still been unable to reverse the avalanche of declining birth rates. Why are young people in China now unwilling to reproduce within just a few years of such a V-shaped turn? The demographic dividend is in crisis: why is encouraging childbirth ineffective? China's economic growth has historically relied on a vast labor force, but the impact of declining birth rates has now spread to the labor market and social welfare system. Why do the younger generation generally lack confidence in the future, preferring to 'lie flat' rather than enter marriage and parenthood? A study published in Sage Journals bluntly states: 'High childcare costs and pressure from housing prices have discouraged many young families even before they step into marriage.' Policies have been continuously introduced, yet the collective choice to 'not have children' remains unchanged, indicating that the issue cannot be solved merely by subsidies. Economic pressure: Housing prices and educational costs are a double whammy. According to research, economic pressure is the primary reason. After estimating the cost of raising a child, the expenses for urban families on preschool education, after-school classes, and medical care for children aged 0-6 already account for nearly 40% of disposable income, easily consuming the cash savings of young parents. Moreover, these expenses will continue to rise as the child grows, until they reach the stage of work and marriage, with costs that are unimaginable. Another more realistic factor is housing prices. (Wikipedia) Data compiled from the population entry shows that housing price-to-income ratios in China's first-tier cities have long remained in double digits, often requiring ten years to save for a down payment. The Think Global Health report also warns that slowing income growth exacerbates the anxiety of 'income growth not keeping up with price increases', making having children seen as an added risk rather than a blessing. Subsidy comparison: China’s amounts are scattered, while Taiwan has a complete system. To boost the birth rate, many provinces and cities in China have promoted one-time childcare subsidies, monthly childcare allowances, and extended maternity leave, and have adopted direct transfers to reduce administrative friction. However, reports from Frontiers in Pharmacology in July and a policy list compiled by China Daily's Hong Kong edition on July 11 both point out that the subsidy amounts generally range between 3,000 to 10,000 yuan, which is just a 'drop in the bucket' compared to the hundreds of thousands needed for raising a child. The days of paternity leave vary by region, ranging from 7 to 30 days, making it difficult to institutionalize male caregiving responsibilities. In contrast, Taiwan manages through a unified system of national health insurance and social welfare. Maternity leave is 56 days, and paternity leave is 5 days, both fully paid. The monthly childcare allowance for children aged 0-6 starts at 5,000 New Taiwan dollars, along with public childcare and kindergarten tuition subsidies. Although the benefits are better, they still have not swayed young couples. Women's choices: Education enhancement brings different life paths. The third force comes from the rapid increase in women's self-awareness. An analysis by Number Analytics in July showed that women's access to higher education and labor participation rates have risen simultaneously, making career development and independent living their core goals. UCL's research adds that although maternal leave can be extended to a year in China, the short paternity leave results in childcare responsibilities still largely falling on mothers, deepening the conflict between work and family. Many interviewed women admit to feeling resistant to becoming 'super mothers'. The Think Global Health report further points out that when household chores and childcare responsibilities are unequally distributed, and promotion opportunities are affected, women are more likely to postpone or even give up having children. This choice is no longer a minority case but a collective action among urban middle-class women, indicating that traditional family models are loosening. In summary, the collapse of China's fertility rate is not a short-term fluctuation but the result of intertwined economic pressures, insufficient policies, and changing gender roles. Experiences from both sides of the strait show that simply increasing subsidies cannot reverse the trend; the real key lies in reducing education and housing costs, strengthening public childcare, and establishing gender-friendly workplaces. Only when young people believe they can 'afford to have children, raise them, and share the burden with others' will the population curve have a chance to stop falling and rise again.

Xi Jinping rarely questions local officials, how significant will China's measures to address overcapacity and ineffective competition 'anti-involution' impact AI, new energy vehicles, and computing power industries? (Background: Huang Renxun: We all agree that 'those who do not use AI will be replaced', and appropriately opening the Chinese market can make the United States stronger) (Background Supplement: Is China anxious? The Service Trade Association started a high-level training course on 'stable coins and innovative development of cross-border e-commerce' in August) The central urban work conference held in mid-July in China originally focused on urban governance, but Xi Jinping, the Chinese president, unusually questioned local officials in public about the uniformity of industrial layout, saying, 'When we talk about projects, it is always a few: artificial intelligence, computing power, new energy vehicles. Shouldn't all provinces in the country develop industries in these directions?' Xi Jinping's stern words certainly caused a stir. The industrial direction in China ignited the 'anti-involution' atmosphere, allowing the outside world to glimpse the cost of China's economic structural adjustment. 'Involution' is a commonly used term in China, describing a situation where internal competition leads to a vicious cycle, leaving no one with a leading advantage. 'Anti-involution' refers to addressing this overlapping and ineffective investment. High-level signals have been frequent. This central urban work conference is the first held in ten years. (People's Daily) published Xi Jinping's spoken remarks in full, highlighting the high level of policy. In fact, the official measures to address 'involution' have been laid out for several months. The government work report in March was the first to include 'addressing involution-style competition' in the text, and in June, the Anti-Unfair Competition Law of the People's Republic of China was revised. In July, the Central Financial and Economic Commission mentioned again the need to govern disorderly competition and promote the exit of backward production capacity. The official connections are evident, and the intent to combat industrial development's involution is clear. The three major excesses: AI, electric vehicles, and computing power. The first to be named was artificial intelligence. Since the 'deep exploration' model became popular in early 2025, AI has been viewed by the authorities as the key to the competition between China and the United States. Apollo Global Management's chief economist, Slok, warned that the AI bubble might repeat the internet bubble of the 1990s, and the rising price-to-earnings ratios of the top ten companies in the S&P 500 deepened external concerns. Xi Jinping himself emphasized innovation and differentiation through official channels, warning against repetitive investments. New energy vehicles are similarly facing involution. Great Wall Motors chairman Wei Jianjun pointed out the widespread phenomenon of 'zero-kilometer second-hand cars' in China, where dealers are selling new cars as second-hand vehicles, with some car manufacturers tacitly allowing this to create a false impression of hot sales. The National Development and Reform Commission has listed this as a typical case and has conducted interviews for rectification. Business Insider's analysis believes that excessive competition has led to price wars, profit compression, and that overcapacity has instead dragged down overall valuation. The construction of computing power has also exposed issues of idleness. Multiple listed companies announced insufficient server deployment rates, with the Green and Low-Carbon Development Action Plan for Data Centers setting a hard target of 60% deployment rate by 2025, reflecting that there is still a large amount of idle capacity. Li Genguo, director of the Shanghai Supercomputing Center, publicly stated: 'The construction of data centers in various places is homogeneous, coupled with insufficient actual demand, leading to long-term idleness of some computing power.' Government fund overlapping investment. The high-level criticism behind this is the structural side effects caused by years of government-led investment models. In just the first half of 2025, 67% of funding in the primary market came from local state-owned enterprises, concentrated in semiconductors, AI, new energy, and biomedicine. Bloomberg reported that government-guided funds are still the main force in the market. Academic research has warned that these funds may exacerbate the homogeneity of high-tech investments between cities, forming low-level redundant constructions. Chinese economist Zhang Weiying bluntly stated: 'Government-led investment funds lack exit mechanisms, artificially extending the life cycle of zombie enterprises and distorting competitive order.' The anxiety of local officials regarding political achievements further amplifies this investment impulse. The recent bankruptcy of Nezha Motors has dragged down financial funds in several provinces, serving as a typical case. Anti-involution aims to prevent further deterioration of the domestic economy. When domestic demand cannot absorb production capacity, low-priced products flood overseas, impacting the international market. Su Yue, chief economist for the Economist Intelligence Unit in China, pointed out: 'Chinese decision-makers are concerned about capacity utilization, but trade partners are more focused on production growth.' The U.S. Secretary of the Treasury has also repeatedly expressed concerns about China's electric vehicle subsidies, leading to increased investigations into anti-subsidy and anti-dumping. A manufacturer in the Yangtze River Delta revealed to BBC that the company blindly expanded production during the pandemic, and now, with weak demand, 'losing a little' is just to maintain employee jobs. This statement reveals the practical challenges of 'anti-involution'; while compressing backward production capacity, it must also consider employment and social stability. Xi Jinping's questions directed at domestic industries mean that the authorities can no longer tolerate homogeneous industrial competition. However, it takes time from policy implementation to industrial changes, and the actual market performance will ultimately be the final score. We will see how far China's industrial structural adjustment can go.