On October 29, 2015, the Fifth Plenary Session of the 18th Central Committee of the Communist Party of China introduced the Second Child policy. Chinese couples can now have two children. This is the biggest change in family planning laws since 2013, where the Chinese government decided to launch a selective two-child policy. There are several reasons for the new Second Child policy: China’s aging population problem; low fertility rates; and the need for economic growth.

Demographics in China

The problem with the Chinese population structure is becoming increasingly prominent. Workforce shortage is a consequence of the low fertility rate, a direct outcome of the Family Planning Policy as it restricted couples to having only one child. The 2000 internationally recognized global fertility rate was 2.1. However, the fifth population census showed that China’s fertility rate was just at 1.22 in the same year, meaning that, on average, each couple had 1.22 children. The 2010 census showed that the figure fell to 1.18 children per couple in China. However, provinces such as Liaoning, Jilin, Heilongjiang scored a fertility rate of only 0.74, 0.76, and 0.75 respectively. According to recent data, the working-age population in China began decreasing in 2012, showing a drop of 3.45 million people from 2011. From 2023, it is expected China will experience an average annual decrease in its working-age population of about 8 million people.

According to the United Nations, China will have nearly 500 million people above the age of 60, click here to see the video; a number expected to exceed the entire population of the United States. Although China’s aging population problem occurred later than other countries like Japan and countries across Europe, the issue inflated most rapidly in recent years. Life expectancy in China is also increasing, but coupled with low fertility rates due to China’s one-child policy, results in a number of foreseeable issues. China’s population is so large that the aging population issue is expected to become the most serious aging population “crisis” in the world. By the end of 2015, Chinese people over the age of 60 accounted for 15.5% of the total population. It is predicted that by 2050, the global aging population will reach 2.02 billion people. Of this, China will account for 480 million of those people, making up almost a quarter of the total global aging population.

A Real Impact on the Birth Rate?

The final outcome of the selective two-child policy did not reach its expected result. In January 2014, all provinces launched a policy that allowed parents who were only children themselves to have another baby. China currently has 11 million families that satisfy these requirements. The outcomes of these families with two children will be realized in the next four to five years. “Four or five years later, the fertility will restore [back to] normal like before,” argues Jiehua Lu, sociology professor at Beijing University. However, by the end of May 2015, 1.45 million couples across the country applied to have two children, more than 1.39 million of them formalities. By the end of 2014, 1.069 million couples had applied to have two children. This, however, was not reflected in actual births as the new birth population in 2014 only increased by 470,000 on top of the 2013 figure.

These changes in government policy bring with them significant commercial opportunities in the baby products and baby food industries, as well as in the pensioner market.

When the new two-child policy was published,some jokes appeared online, such as: “I heard that China now allows couples to have two children! The cows in Germany, Britain, Australia, Holland and New Zealand will be exhausted!” This could be connected with a previously published article addressing the baby food market in China that outlines the demand for foreign baby food products, and some discussions about pension trends in China.

Irene, China Sensory Panel Consultant