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 About 90 million families may qualify for the new two-child
policy, which would help raise the population to an estimated 1.45
billion by 2030, the National Health and Family Planning Commission
said in an online statement. China, the world's most populous
nation, had 1.37 billion people at the end of last year.
The policy, initially announced on Thursday by the ruling Communist
Party, represented a further relaxation of the long-standing and
controversial "one-child policy". Beijing hopes it can help offset
the burden of an aging population.
For decades, China harshly implemented the one-child policy, leading
to forced abortions and infanticides across the country. In recent
years, however, the policy has been relaxed, and some couples are
allowed to have a second child. Others are permitted a second child
if they pay a fine.
Despite Thursday's relaxation of the policy, the government will
remain heavily involved. Families wishing to have a second child
would still need approval, although eventually the commission will
seek to shift to a system of registration rather than approval,
deputy director Wang Peian said in the statement.
Critics say the policy change comes too late and will not have the
desired effect. By around the middle of this century, one in every
three Chinese is forecast to be over 60, with a shrinking proportion
of working adults to support them.
Wang said the commission expected a labor force aged between 15-59
years to rise by about 30 million by 2050, stabilizing expectations
for economic growth.
After taking power in 1949, the Communist government promoted big
families but in the late 1970s it introduced the "one-child policy"
as a way to keep the population from spiraling out of control.
China's birth rate stands at about 1.6 children per family,
according to Lu Jiehua, a professor in Department of Sociology,
Institute of Sociology and Anthropology in Peking University.
"If this figure doesn't rise significantly after five years, I think
the government will take further steps to cut restrictions on
births. Ideally the rate should be 2.1, which can boost the economy
and social development best," said Lu.
BUSINESS OPPORTUNITIES
With a modest rise in the fertility rate to 1.74, Zhou Hao, senior
Asia emerging markets economist at Commerzbank AG, said the ratio of
people over 65 years old to those aged 15-64 would climb to 43
percent by 2050 from 13 percent this year.
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"In fact, under any projection, China's old-age dependency ratio
will pick up sharply, which means that the relaxation of population
policy will only smooth the slope of old-age dependency ratio over
time," he wrote in a note.
Still, Credit Suisse saw business opportunities in any increase in
births. The policy relaxation would result in three million to six
million additional babies per year, or a boost of 17-33 percent from
the current 16.5 million newborns per year, it said in a separate
note.
Assuming the cost of raising a child to be about 40,000 yuan a year,
the additional consumption would amount to 120 billion to 240
billion yuan a year from the end of 2017, or 4-6 percent of total
retail sales, it estimated.
Investors were quick to trade on the news, pushing up shares of toy
makers and other childcare-related stocks in Shanghai and Hong Kong.
Shares of baby stroller maker Goodbaby International Holdings Ltd
and diaper maker Hengan International rose more than 5 percent and 2
percent respectively. Instant formula makers also gained, with
Beingmate Baby & Child Food Co rising by the daily limit of 10
percent.
Beijing loosened the family planning policy in late 2013, allowing
couples to have a second child where one partner was an only child,
but as of June, only 1.5 million of the 11 million eligible couples
applied to expand their family, said the paper.
Yuan Xin, a scientist at Nankai University in Tianjin, was quoted by
the China Daily newspaper as saying the latest change will have a
greater impact on rural families who are more interested than city
dwellers in having larger families.
(Additional reporting by Engen Tham, Nathaniel Taplin, Adam Jourdan
and Pete Sweeney in Shanghai; Writing by John Ruwitch; Editing by
Raju Gopalakrishnan)
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