China To Relax Birth Policy But Wary Of Social Risks, Sources Say

China To Relax Birth Policy But Wary Of Social Risks, Sources Say

China will tread carefully in relaxing its birth policies for fear of harming social stability, even as the latest census highlights the urgency to address the country's declining birth trends and ageing population, policy sources said.

Andrew H. Sweet
  • According to policy sources, China will proceed cautiously in relaxing its birth policies for fear of jeopardizing social stability.
  • The most recent census emphasizes the importance of addressing the country's declining birth rates and aging population.
  • In the late 1970s, China implemented a contentious "one-child policy," but relaxed restrictions in 2016 to allow all couples to have two children.
  • However, the change failed to halt declining births as it attempted to rebalance its rapidly aging population.
  • The risk is emphasized by a fertility rate of 1.3 children per woman in 2020, which is comparable to that of ageing societies such as Japan and Italy.
  • In recent weeks, the People's Bank of China has become more vocal about the sensitive population issue.
  • The PBOC stated in April that China should "fully liberalize and vigorously encourage childbirth."
  • Demographic changes may cause economic stagnation, a drop in the savings rate, and asset price deflation.
  • The growing rivalry between China and the United States has increased the urgency for China to build a more innovative economy.
  • China aims to reduce its reliance on foreign markets and technology under President Xi Jinping's "dual circulation" strategy.

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