China scraps one-child rule, lets couples have a second

30 October 2015

China abandoned its decades-old one-child policy  onThursday to confront a looming slump in the economy's workforce.

All couples will be allowed to have two children, China's official Xinhua news agency announced as the Communist Party brought an end to decades of strict, sometimes harsh enforcement of the rule.

But there are serious doubts that Chinese couples want more children. And even if they did, it would take at least 15 years before their offspring were old enough to have an impact on the greying workforce, according to an AFP report.

"In reality, the one-child policy had already been abandoned," said Patrick Artus, analyst at French investment bank Natixis.

The strict rules introduced in the 1970s have been progressively relaxed, with Beijing announcing in 2013 that couples could have two children if either of them was an only child.

"That did not lead them to deciding to have more, for reasons linked to changes in ways of life, urbanisation, women working, and the fact that good schools are very expensive," Artus said.

Beijing's decision is a sign of President Xi Jinping's determination to avoid an economic slowdown.

Growth in the world's second largest economy is likely to slow to around 7 per cent this year, the lowest rate in a quarter century and a long way from the double-digit rates that it enjoyed just a few years ago.

At the same time, China is heading towards a demographic shock.

According to UN forecasts prior to Beijing's announcement, the Chinese population aged 15-59 is set to fall by around 9 per cent between 2015 and 2030.

Women in China's poorest rural areas were already allowed to have more than one child.

In the meantime, shares in companies making baby food and nappies have climbed on the stock market on rumours of the impending end to the one-child rule.

Shares of baby stroller maker Goodbaby International Holdings Ltd and diaper maker Hengan International jumped on Friday, as did shares of infant formula maker Biostime International, milk powder maker Yashili International, and dairy products maker China Mengniu Dairy.

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