Facing stagnating population growth, China relaxes two-child policy

Parents in China will now be permitted to have a third child, in a major departure from the country’s existing two-child limit, as part of a response to declining birth rates in the world’s most populous country.

The two-child limit was introduced in 2016, replacing the country’s one-child policy, but seems to have failed to inspire a sustained increase in births.

Along with the relaxation, the Government will provide “supportive measures, which will be conducive to improving [China’s] population structure, fulfilling the country’s strategy of actively coping with an ageing population and maintaining the advantage, endowment of human resources”, President Xi Jinqung.

It comes as, earlier in May, China reported its slowest population growth since the 1960s.

The country’s 10 year-ly census showed that the overall population of China grew by 5.38 per cent in the decade to 2020, representing an annual average rise of 0.53 per cent.

Notably, however, and despite the 2016 relaxation, this is actually below the figure in the decade prior, when the population grew by 0.57 per cent annually.

This slow-down represents a worrying demographic trend for the country, which has seen a general decline in terms of the number of births per 1,000 people since the late 1980s.

But it does not seem to be the legal restrictions alone which has seen this slowdown.

Responding to the announcement on Chinese social media, many commentators claimed not to be able to afford children, with low income and high living costs making it challenging to have one child, let alone three.

The economic implications of an ageing population and slower labour force growth could be major.

According to Finance and Development report in 2017, the phenomenon could see GDP growth slowing, support costs rising, and Government budgets facing increasing pressure.