China is now letting couples have up to 3 children, a huge turnaround from its family-planning restrictions from the ’80s

Baby and mother
Mother and child.

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On Monday, China’s government said that couples will be able to have a third child, a decision meant to spark more babies in a country where population growth has hit a wall.

The backstory: Family planning restrictions have existed in China since 1980, when the government instituted a one-child-per-household policy out of fear it wouldn’t have the resources to provide for a swelling population. China relaxed that cap to two children in 2015 but, following the pandemic’s baby bust, it’s realizing it needs to confront this problem more urgently.

  • There were 12 million births in China in 2020, down 18% annually and the fourth straight year of declines.
  • Demographers expect the country’s population, currently at 1.4 billion, to peak by 2025.

Why it matters: Declining population growth has profound implications for a country’s economic success. Fewer babies = fewer future workers. And it could upend existing systems of support for the elderly, because younger workers’ taxes subsidize public services for retirees.

This isn’t just a China problem

A “demographic time bomb” alarm is being sounded in dozens of countries.

  • South Korea’s rate of births per woman fell to 0.84 last year, the lowest in the world. For reference, the “replacement” rate that would keep a population stable is about 2.1.
  • The US population grew at its slowest rate since the Great Depression from 2010-2020, and its birth rate declined for the sixth straight year last year.
  • Germany doesn’t have enough people to fill its cities. It’s taken down 330,000 housing units since 2002.

Zoom out: While many parts of the world face stagnant population growth, others are making up for it. Africa’s population is set to double by 2050, helping the world grow from 7.8 billion people today to 11 billion by 2100.

Bottom line: As much as the Chinese government wants to grow the country’s share of the world population, it might be fighting a losing battle. The two-child policy didn’t lead to more babies, and critics say the three-child rule won’t move the needle, either.

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China will allow couples to have 3 children in a major policy shift designed to reverse shrinking birth rates

Xi Jinping
Chinese President Xi Jinping

  • China is now allowing married couples to have three children, up from the previous limit of two.
  • The new three-child policy is in response to a declining birthrate in China.
  • Experts say the main barrier to having children in China is the high cost of raising kids.
  • See more stories on Insider’s business page.

China said on Monday that married couples may have up to three children, a major policy shift from the existing limit of two, after recent data showed a dramatic decline in births in the world’s most populous country.

Beijing scrapped its decades-old one-child policy in 2016, replacing it with a two-child limit that failed to trigger a sustained surge in births. Raising children in Chinese cities remains expensive.

“To further optimize the birth policy, (China) will implement a one-married-couple-can-have-three-children policy,” the official Xinhua news agency said in a report following a meeting chaired by President Xi Jinping.

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 and maintaining the advantage, endowment of human resources,” Xinhua reported.

It did not specify the support measures.

“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,” he said.

In a poll on Xinhua’s Weibo account asking #AreYouReady for the three-child policy, about 29,000 of 31,000 respondents said they would “never think of it,” while the remainder chose among the options: “I’m ready and very eager to do so,” “it’s on my agenda,” or “I’m hesitating and there’s lot to consider”.

The poll was later removed.

“I am willing to have three children if you give me 5 million yuan ($785,650),” one user posted.

Shares in birth- and fertility-related companies surged.

Early this month, China’s 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. Data also showed a fertility rate of just 1.3 children per woman for 2020 alone, on a par with ageing societies such as Japan and Italy.

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

Fines of 130,000 yuan ($20,440) were being imposed on people for having a third child as of late last year.

Read the original article on Business Insider