Half of the 17.58 million births in 2017 were a second child, the country's National Health Commission (NHC) said on Tuesday.
"China's two-child policy has been showing some results," NHC officials said.
Compared to 2016, 2017 registered 880,000 fewer births. 2016 saw 18.5 million newborns, the highest since 2000 and 1.3 million more than in 2015, and about 45 percent of them had an older sibling.
Yuan Xin, a demographer at Nankai University, told the Global Times that a decreasing number of women in the most fertile age group of 20 to 34 has led to fewer births. The higher costs of raising children are another reason.
The number of women aged 15 to 49 dropped by 4 million in 2017 compared with 2016, he said.
"But overall, China's two-child policy has seen good results as half of newborns in 2017 are a se-cond child," Yuan said.
To cope with the aging population, couples have been allowed a second child since 2016, ending the decades-long one-child policy.
South China's Guangdong Province recently lowered penalties on people who have children outside the state plan.
Guangdong has removed the regulation that residents who work in State-owned companies and have more children than allowed would be fired and not be hired by State-owned enterprises for five years, Dongjiang Times reported on Sunday.
The move means that China encourages families to have children within the State plan. The local governments should also change its population policy accordingly, Yuan said.
China will not experience a labor shortage over at least the next three decades but may go through the most significant aging phase in history, Yuan added.
The NHC also said the average life expectancy was up from 76.5 in 2016 to 76.7 years in 2017, while the infant mortality rate dropped from 0.75 percent to 0.68 percent, and the maternal death rate fell to 19.6 every 100,000 births.
