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Relaxing one-child policy will create near-term baby boom but real benefits will take years to see

Allowing more couples to have a second child will create baby boom in the short term, but greater benefits will take years to materialise

PUBLISHED : Tuesday, 19 November, 2013, 5:09am
UPDATED : Tuesday, 19 November, 2013, 9:16am
 

Relaxing the one-child policy will see a small baby boom in the near future, but long-term benefits including alleviating the ageing problem probably might not be seen until the end of the century, demogra phers say.

The Communist Party's Central Committee decided last week to allow couples where one of the parents is a single child to have two children to help alleviate looming demographic problems. These include a rising proportion of elderly, a sharp decline in the labour force and imbalances in the structure of families.

Such a policy change would not immediately result in an significant improvement of such problems, said Yuan Xin, a demographer at Nankai University in Tianjin . Rather, it would cause gradual changes the structure of the population, the benefit of which can only be observed in the long run.

"This policy change is only a transitional one to allowing all couples to have a second child. But how soon that happens depends on how big the baby boom will be," Yuan said. "Provincial-level authorities will draft individual policies to guide couples plan second children in a reasonable way to avoid big fluctuations."

Yuan projects that the policy change would mean that the aged population - 60 years and above - would drop from 24.1 per cent of the population to 23.8 per cent in 2030, and from 34.1 per cent to 32.8 per cent in 2050. The share in 2100 would drop from 39.6 per cent to 34.3 per cent.

"A drop in the aged population of five percentage points means a lot from many perspectives," Yuan said .

The extra births, projected to be about one million each year, will add new blood to the labour force, which is projected to drop sharply over the next 15 years, and increase the labour force of 15- to 59-year-olds, from 700 million to 726 million in 2050.

"The biggest impact of the policy change will be the improved family structure and resources - from the four grandparents, two parents, one child, to the more reasonable four grandparents, two parents and two children," Yuan said.

As China becomes greyer, single children may at one point have to support two parents and four grandparents.

"The improved family is better protected in times of crisis and greatly improves ageing problems," he said. "It is also closer to traditional Chinese culture, too."

But long before those benefits begin to show, the mainland is expected to see a baby boom, adding pressure to already stretched social and economic resources.

Provincial-level family planning authorities have responded positively to the policy, with the Beijing municipal government, saying the regulation on family planning would be modified next year as a step towards implementing the policy. Guangdong province has said it has prepared well for the change as long as the central government gives it a go. Xinjiang also said it would implement the policy.

Investors reacted positively to the policy change. Share prices rose for nine companies dealing with maternity and baby products - including Qunxing Toys and Gaole Toys - rose to the 10 per cent increase limit before trading was suspended.

Video: China announces easing of one-child law

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