China considering ending all birth limits
After ending the controversial one-child policy in 2016, the Chinese government has hinted that it might replace the National Health and Family Planning Commission with a proper health ministry and ditch all restrictions on the number of children altogether. China has been facing a severe population crisis as its population ages rapidly with not enough children being born to help rejuvenate the numbers.
According to estimates for the UN, it is estimated that that the population aged between 15 and 59 is expected to fall by 9% within the next 15 years and that almost a quarter of the population will be above the age of 65 by 2050. This was predicted by the Asian Development Bank in one of its recent reports.
Impact of discontinuing the one-child policy
The Chinese government had realized the extent of the problem caused by the policy introduced in the 1980s to ease the load on the country’s economy and natural resources by preventing a population boom. Experts believe that China’s recent economic growth had nothing to do with this policy instead it was all down the better financial regulations.
The country has faced a demographic dividend, a phenomenon where the ratio of the working age population to those above or below the working age drops below 50% for a long time. But the end of the one-child policy has changed this. When the regulations were abolished in January 2016, the country saw an 8% rise in birth rates. But experts believe that relaxing these limits won’t have a lasting impact on the fertility rates.
Predictions for the economy
The continued implementation of the one-child and now the two-child policy has had drastic impacts on the current and, more worryingly, the future of the Chinese economy. This is because the aging populace is not being replaced effectively and as a result the labor force is shrinking. Furthermore, experts and analysts believe that even if the government decides to abolish the restrictions on number of children a family can have altogether, there are little chances that the fertility rate will improve because the people are making a conscious choice about not having more children.
Impact on the stock market
The announcement of the two child policy back in 2015 saw the stock market show a healthy trend and especially stocks for companies that traded in baby products began to go up even when the implementation was months away. This is being seen as a healthy reminder and basis for predictions on how the markets will react to the new regulations that are still only speculations.
The Chinese economy is in dire need of the government to relax its birth restrictions and then follow it up with measures to boost fertility rates or analysts believe that the population would continue on a downward spiral and would take the economy with it. What the country’s lawmakers decide eventually is yet to be seen but there are considerable chances that they will give in to the increasing pressures on the economy.
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