Married couples in China are now allowed to have up to three children. The major announcement is a big shift from the existing two-child limit. It comes after recent data showed a sharp decline in births in the nation.
Beijing got rid of the decades-old one-child policy in 2016 and replaced it with a two-child limit in an effort to save its economy from a rapidly aging population. However, that failed to result in a sustained surge in births given the high cost of raising children in Chinese cities.
The policy change will come with “supportive measures, which will be conducive to improving our country’s population structure, fulfilling the country’s strategy of actively coping with an ageing population”, the official Xinhua news agency said after a meeting chaired by President Xi Jinping.
Among those supportive measures are lower educational costs for families, more tax and housing support, focus on the legal interests of working women, and a crackdown on “sky-high” dowries. It would also try to educate young people “on marriage and love.”
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.
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