From One-child Policy to Two-child Policy

All Chinese couples can have two children now， according to the communiqué issued after the Fifth Plenary Session of the 18th Communist Party of China（CPC） Central Committee on Oct 29.

The decision， aimed at balancing population development and solving the aging population problem， is the greatest change in Chinas family planning policy since 1979 when the country introduced the one-child policy to curb a then-surging population and alleviate social， economic and environmental problems.

Over the past three and half decades， the one-child policy in most cases limited families living in urban areas to only one child， which led to many social problems， including the “4-2-1 Problem”.

In recent years， the compulsory one-child policy became controversial as the public learned the misery of elderly couples who lost their only child. More significantly， Chinas workforce is shrinking as its population is quickly aging.

Allowing couples to have a second child will reduce a familys risk of becoming childless after losing its only child in an accident or to illness.

In fact， as early as 2013， China relaxed its longstanding one-child policy in response to lower population growth， allowing couples to have two children if either parent is an only child.

Now， the decade-old one-child policy finally comes to an end. According to a communiqué， a final plan for the policy change will be ratified by the annual session of Chinas top legislature in March， 2016.

The long-awaited two-child policy excited the public. Businesses are hoping the new two-child policy will help boost growth， such as real estate， online education and child care. Investors also begin seeking opportunities in related sectors， propping up stock prices in both Chinese and overseas markets.

Maternity medical care， baby formula， clothes， toys and cartoons will be key areas for investment， according to Li Shaojun， an analyst with brokerage Minsheng Securities.

James Liang， an economics professor with Peking University， predicted that the annual number of births would increase by 2.4 million.

“If 30，000 yuan （about $4，724） is spent on a baby annually， new consumption worth 75 billion yuan will be created，” said Liang.

Private and government investment in housing， education and infrastructure needed to deal with this baby boom could reach 225 billion yuan every year in the next five to 10 years， according to his calculation.

“Consumption and investment generated by the two-child policy will help the struggling Chinese economy to stabilize，” said Liang.