China Scraps It’s Two-Child Policy

According to recent data, China had a fertility rate of just 1.3 children per woman in 2020. That is on par with other aging societies like Japan and Italy. It is far short of the roughly 2.1 needed for replacement level.

“People are held back not by the two-children limit, but by the incredibly high costs of raising children in today’s China. Housing, extracurricular activities, food, trips, and everything else add up quickly,” Yifei Li, a sociologist at NYU Shanghai, told Reuters. “Raising the limit itself is unlikely to tilt anyone’s calculus in a meaningful way, in my view.”

Zhang Xinyu, a 30-year-old mother of one from Zhengzhou, the capital of Henan province, said the problem was that women take on most of the responsibility for raising children.

Share prices in birth- and fertility-related companies have surged.

Early this month, a once-in-a-decade census showed that the population grew at its slowest rate during the last decade since the 1950s, to 1.41 billion. This fueled concerns that China would grow old before it gets wealthy.

“This is without a doubt a step in the right direction, but still it’s a bit timid,” Shuang Ding, chief economist at Standard Chartered in Hong Kong, told Reuters.

“A fully liberalized birth policy should have been implemented at least five years ago, but it’s too late now, although its better late than never,” he said.

China’s politburo also said that it would phase in delays in retirement ages, but did not give any details.

Fines of 130,000 yuan ($20,440) were being imposed on people for having a third child as of late last year, according to a government notice in the city of Weihai.

Fearing a population explosion, China implemented its one-child policy in 1979. This succeeded in curbing population growth but also led to coerced sterilizations and sex-selective abortions that exacerbated a gender imbalance as many parents preferred male children.

A study published earlier this year by academics from Hangzhou University found that the two-child policy encouraged wealthier couples who already had a child and were “less sensitive to child-rearing costs,” while driving up the costs of child care and education and discouraging first-time parents.

Su Meizhen, a human resources manager in Beijing, said she was “super-happy” to be pregnant with her third child.

“We won’t have to pay the fine and we’ll be able to get a hukou,” she said, referring to the urban residence permit that enables families to receive benefits including sending their children to local public schools.