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Changes to Family Planning Likely in China

Beijing will likely announce more exceptions to its one-child policy, following the four-day Third Plenum of the Communist Party, which began on Saturday. There have been suggestions that couples where either the husband or the wife is a single child will be able to have a second child. At present, this only applies to couples who are both single children. It is likely the policy will be piloted in some cities rather than nationwide to prevent birthrates from spiking.

China’s one-child policy, introduced in the 1970s, fueled a rapid demographic shift. An unintended consequence of the policy was sex selection, as males carry the family name and traditionally look after their parents while females move in with the husband’s family. The United Nations estimates that 117 million women are missing in China because of sex selection and that by 2020 there will be 24 million more men than women at marriageable age, exacerbating the aging population. Relaxing the policy could lower the gender imbalance.

Easing the current family planning policy is desirable to help cushion the forecast jump in China’s old-age dependency ratio. In the next decade, a rising proportion of the population will shift into retirement, placing an unsustainable burden on the shrinking working-age population.

Katrina Ell is an Associate Economist at Moody's Analytics.

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