In a major shift from the existing two-child policy that has failed to raise the country’s declining birth rates and avert a demographic crisis, China announced on May 31st that they now allow all married couples to have three children.
In 1979, China introduced its controversial one-child policy to prevent Chinese couples from having multiple children to limit its increasing population growth and boost the economic development. In 2013, realizing the severity of the aging population, the government allowed parents who came from one-child families to have two children. Three years later, in 2016, China ended its decade-old policy and replaced it with a two-child initiative in the attempt to mitigate the risks of the rapidly aging population. Despite a short-lived jump in birth rates, the initiative has yet to show any significant, long-lasting results given the high cost of raising children in the country.
Recently, data from China’s seventh decennial census, released on May 11th, indicated that only 12 million children were born in 2020, a decline of nearly 20% from 2019. Besides, the fertility rate of China stood at 1.3 children per woman in 2020, which is far below the expected level of 2.1 to reach a stable population. The survey also showed that the proportion people of the age 60 and over rose from 8.9% in 2010 to 13.5% in 2020, and the average age of Chinese is predicted to reach 46 by 2050, indicating China’s rapidly aging population.
In a major policy revision intended to address the problems of its aging population and shrinking labour force, China recently further relaxed its limits on reproduction and announced that it would allow all married couples to have up to three children. The implementation of this new three-child policy is a part of the renewed attempts of China’s government to improve the imbalance population structure, actively cope with the substantial aging population and preserve the country’s human resource advantages.
The new policy change will also come with a variety of supportive measures. China will reduce the educational costs, expand maternity leave and workplace protection for pregnant women and step-up tax and housing support.
Although there is no certainty about the effectiveness of the new policy, China’s stock market has already responded to the news with an optimistic feeling. According to Reuters reports, stocks related to baby products and services, such as toy makers and diaper manufacturers, surged as soon as the news came out.
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