BABY BOOM?

By+Wang+Hairong

The evening of October 29 unexpectedly turned sensational in China as the ruling Party announced plans to relax the countrys birth rule.

“We should comprehensively implement the policy that allows every couple to have two children，” read an inconspicuous line lying at the end of a lengthy paragraph in the nearly 6，000-word communiqué released at the conclusion of the Fifth Plenary Session of the 18th Central Committee of the Communist Party of China held in Beijing on October 26-29.

The simply worded line quickly excited the nation. People poured jokes and witty remarks into social media platforms， called family and friends， and had discussions with their partners about what it would mean for their own familys future.

“People all over the country spent a sleepless night. Those born in the 50s and 60s wondered about whether they would have another child or grandchild， those born in the 70s about whether to have one more child or not， those born in the 80s about who they should take care of first if their partner and mother give birth at the same time， and those born in the 90s and 00s about whether they should call a kid brother or uncle in the future，” read a post widely circulated on the popular social networking service WeChat.

The new policy will formally take effect nationwide after the national legislature revises the Population and Family Planning Law， said Yang Wenzhuang， a senior official with the National Health and Family Planning Commission（NHFPC）， in an interview with China National Radio on November 4.

China introduced the family planning policy in the 1970s to curb the population explosion. In 1982， it was made a basic national policy and coded into the Constitution. In the ensuing decades， the policy， which restricted most couples to only one child， was strictly enforced， with exceptions made for rural couples whose first child was a girl， families with a handicapped first child， and ethnic minority couples.

There had been growing calls for adjusting the policy in recent years， especially given the realities of an aging society and its complications.

Since late 2002， couples across the country who are themselves both only children have been allowed to have two children. Restrictions were further loosened at the end of 2013 by allowing parents to have a second baby if at least one of them is an only child.

One or two？

Ninety million couples all over the country will be eligible to have a second child under the new policy， said Wang Peian， Vice Minister of the NHFPC， on October 30.

He said that in the next few years， the total number of births will increase， and the annual number of babies born in China is expected to peak at more than 20 million. According to the National Bureau of Statistics， Chinas mainland had a population of 1.367 billion in 2014 and 16.87 million children were born that year.

Some demographers and economists have given a more detailed forecast.

Had the universal two-child policy been implemented simultaneously across China from November 1， an estimated 2.3 million additional babies would be born next year under the new policy， said Wang Guangzhou， a demographer with the Institute of Population and Labor Economics under the Chinese Academy of Social Sciences. The number of additional newborns may peak in 2017 at around 4.3 million， he told Shanghai-based China Business News.

For a couple in their early 30s living in Beijings Haidian District， the policy is very timely. Wu and his wife both work for joint-venture IT companies and have a 5-year-old son. They had been ineligible to have a second child because neither of them is an only child.

“With the new policy we are ready to go，”Wu told Beijing Review. He said that they recently switched their one-bedroom apartment to a three-bedroom and their parents just reached retirement age and are ready to help. Besides， with their decent salaries， they do not worry about the expenses of raising an additional child.

Twenty-seven-year old Jiang and his wife are very happy to hear the news， too. The newlywed plan to have two in the future.

Li， 38， is also glad to learn that the new policy makes her eligible for a second child， although she and her husband do not want to change their current lifestyle. She teaches in a prestigious middle school in Beijing and her husband works for an insurance company. Their son is in second grade. The couple has enrolled their child in a number of pricy afterschool courses and plans to take him to see different places around the world during school holidays.“We do not want to be tied down by another baby，” Li said.

When asked whether he would like to have a second child， 46-year-old Han in Shandong Province dismissed the idea outright. “My wife would not agree，” he said. He has a 17-year-old daughter and he is very happy with her. “She has never made any trouble，” Han said.

Some eligible couples may be too old to have a second child. Vice Minister Wang revealed that about 60 percent of the eligible women are over 35 years old. Approximately 40 percent of married women who are of childbearing age and have only one child are older than 40， according to Wang Guangzhou.

A poll conducted on news portal 163.com on October 29-30 showed that among the 4，000 respondents， 24 percent answered that they planned to welcome a second child， 29.5 percent were still mulling if their conditions allow for it and 43.7 percent ruled out any possibilities for an additional birth.

Another poll posted at Cnfol.com， a busi-ness news website， revealed that among the 315 participants， 39.37 percent replied that they would have a second child while 60.63 percent answered “no.” Of the total who said“no，” 51.11 percent said that they would not have energy for a second child. When asked about the benefit of having a second child， 71.11 percent of all participants said that they would want two children to keep each other company， while 17.46 percent answered there would be one more child to take care of them when they get old.

Lu Jiehua， a sociology professor with Peking University， said that the age group that will benefit the most from the universal two-child policy is those born in the 1970s， though those born in the 80s and 90s will account for a larger share of those giving birth to two children， whereas for those born in the 1950s and 60s， the policy comes too late.

Why now？

In the past four decades， Chinas family planning policy has effectively curbed the rate of population growth， and the countrys current fertility rate is now equivalent to that of developed countries， said Wang Peian.

He said that family planning had created a demographic dividend， which refers to a relatively larger share of working-age people coupled with a smaller share of dependents， for quite a long time， providing abundant labor forces to fuel Chinas rapid economic development. Research shows in the past three plus decades the demographic dividend has contributed to more than 20 percent of the growth in per-capita income in China.

However， the vice minister admitted， as the demographic structure changes significantly， new challenges have arisen. The number of women of child-bearing age has gradually reduced， with the number of those aged 20-29 dropping particularly fast， the working-age population has dwindled， the population is aging， and the gender ratio has long been imbalanced.

Multiple sources found that Chinas total fertility rate already dropped to below the internationally accepted replacement level of 2.1 births per woman in the early 1990s. Replacement level fertility is defined as the total fertility rate required for the population to replace itself in the long term， without migration.

“The average fertility rate in China was 1.513 children per woman in 2013 and 1.579 in 2014，” said Zhai Zhenwu， Vice President of the China Population Association and a sociology professor with Renmin University of China.

Moreover， official statistics show that in 2014， 15.5 percent of Chinas population was at least 60 years old. According to international standards， a country or region is considered to have an “aging society” when the number of people at and above 60 reaches 10 percent or more of its total population.

“Because of the small size of households， their traditional function in caring for the elderly and young has been weakened，” Wang Peian said.

Previous media reports also warned that Chinas demographic dividend has been shrinking since 2012， which will have significant impacts on economic growth.

In the next few years， labor resources will still be relatively abundant in China， and the social burden for taking care of dependents will be relatively light， so it is a good time to adjust the family planning policy， Wang Peian commented.

Many demographic scholars believe the ineffectiveness of the birth policy adjustment in 2013 in substantially boosting the birth rate had prompted policymakers to further relax controls. Since then， parents have been allowed to have one more child as long as one of them is an only child.

According to official statistics， 11 million couples are currently eligible to have a second child under the policy， 70 percent of whom were born in the 1980s. When the policy was launched， it was expected that 2 million additional children would be born every year as a result. By September of 2015， only 1.76 million eligible couples across the country had submitted applications to have a second child， while 470，000 babies were born under that policy in 2014.

That the previous policy has not fully reached its expected goal is an important reason that the universal two-child policy was announced at this point in time， remarked Lu.

Expected impact

Wang Peian said that in the short run， the universal two-child policy will boost demand for women and childrens health services， baby products， child-care and education； and in the long run it will increase the work-age population between 15 and 59 by about 30 million by the year 2050. It will also help stabilize expectations about economic growth.

Assuming an annual additional 2.5 million babies will be born and an average of 30，000 yuan （$4，740） is spent per baby per year， James Liang， the founder of Ctrip. com and an economics professor at Peking University， predicted that the new policy will generate consumption of 75 billion yuan（$11.82 billion） per annum. In addition， the baby boom is expected to generate 225 billion yuan （$35.48 billion） of investment every year in housing， education and other sectors in the next five to 10 years. Adding the two figures together， Liang estimated that the new policy will increase Chinas annual GDP by approximately 0.5 percent.

While population growth will boost consumption， it will also add pressure on the environment and available resources. Wang Peian said that Chinas population is expected to reach 1.45 billion by 2030， so China will remain a populous country， and the relation between the population and the environment will be strained. According to the estimation of relevant government departments， energy and food supply in China is at a level that the country can afford the universal two-child policy.

He argued that the demand for medical care and childcare services and for education can be met through increasing investment and making good of existing facilities.