China will allow all couples to have a third child, a shocking move aimed at lowering the nation's birth rate as a threat to long-term economic prospects due to the aging population.
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At a meeting chaired by President Xi Jinping on Monday, the Politburo of the Communist Party decided to reduce the current two-child limit, saying "allowing every couple to have three children and implementing policies that would help improve the human condition," according to a Xinhua News Agency official. It is not yet clear when the move will take effect, although the meeting discussed major policy approaches to be implemented by 2025.
China has been slowly changing its hard-fought birth goal for decades to put more families into having only one child, with a second child allowed since 2016. However, such changes do little to reverse the declining birth rate and the more relaxed limitations are unlikely to lead to continued growth.
Why China Strives To Raise Its Birth Level: QuickTake
No Hair Boom
China's birth rates have plummeted since 1961
Some government officials, including researchers from China's largest bank, have called for the abolition of birth control. The controversy intensified after the results of China's latest census earlier this month showing a decline in the country's working population over the past decade.
The Politburo also announced that the government would "carefully increase the retirement age," according to a Xinhua report. China has one of the lowest legal retirement years, and the Communist Party announced plans to change the plan last year.
The decline in childbirth means that China's population, currently 1.41 billion, could begin to decline before 2025, according to Bloomberg Economics. There were 12 million new babies born last year amidst the uncertainty of coronavirus infection, the lowest number since 1961.
Drag Staff
"It is possible that the Politburo has seen the latest census results and with all public consensus on change, it is now easier to make a decision," said Henry Wang, president of the Center for China and Globalization, with former government officials on its advisory board. . ” "They probably need some time before they can completely abandon" birth limits, "he said. "If these improvements do not help, that will help them make the next decision," he added.
The policy change was quickly ridiculed on Chinese social media, with many people complaining that couples from single-parent families now have to raise three children while supporting four elderly parents and repaying a huge mortgage. It also raised concerns about the employment of women, with some saying it would be more difficult for women to find work as companies were less likely to be willing to bear the cost.
China's new three-pronged policy is a step in the right direction but it is not enough to pull the inevitable pull on the economy. Other measures, including parent-child and parent-child policies and an increase in pension age, are urgently needed if China is in a position to reduce future cuts in its labor and cracks in the elderly.Eric Zhu, an economist in China
The tendency for fewer births is likely to continue either with a free birth policy, according to census statistics. As in East Asia and Europe, favorites have shifted to smaller families. The birth rate following previous rest to allow more families to have two children was temporary, with many parents describing the high cost of housing and education as a limiting barrier.
"For those who are rich, relaxing the policy will encourage them to have more children but ordinary citizens, such as middle or even lower, do not have enough motivation to implement this new policy," said Vivian Zhan, a Chinese political scientist at China University of Hong Kong.
Interest patterns
Shares in Chinese infant-care companies have risen sharply following Beijing's announcement. Milk Formula Manufacturer Beingmate Co Ltd. increased by 10% in Shenzhen, while fertility clinic provider Jinxin Fertility Group Ltd. rising by about 24% in Hong Kong.
"We did not expect the policy change to make a significant difference to China's reproductive patterns, there are other changes taking place in the family environment," said Stuart Gietel-Basten, director of the Center for Aging Science at Hong Kong University of Science and Technology, adding. clear in the narrative surrounding the concern for low fertility and limitations at the same time. "
China has maintained rapid economic growth in recent decades despite slow population growth, with urbanization proposing changes in agriculture to factory and labor, which has increased economic productivity per job. The current population living in urban areas by about 64% is almost the same as in the US in 1950, suggesting that there may be a continuation of arrests. Delaying retirement will allow China to increase its workforce without increasing its birth rate.
Decrease in staff "We need a comprehensive package of policies ranging from tax incentives, education and housing subsidies, kind maternity leave, child care provision" are needed for a three-pronged child policy, says Liu Li-Gang, China's executive director and chief economist. of Citigroup Inc. The government will need to rebuild the social security net, and contain housing prices and reduce education costs, he said.
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