China has relaxed its family planning policy by allowing its citizens to have a maximum of three children. The news seemed to be a windfall for investors making baby strollers, to formula milk.
Quoting from CNN, Wednesday (2/6/2021), stocks related to baby products and maternity services surged in China and Hong Kong on Monday (31/5). This came after the government announced changes to its family planning policy to prevent a demographic crisis.
Goodbaby, which makes children’s products, jumped 31% in Hong Kong. Suzhou Basecare Medical Co., which offers genetic testing for couples wishing to undergo IVF (in vitro fertilization), also rose 15%.
Jinxin Fertility Group, which provides reproductive services, rose nearly 18%, while Aidigong Maternal & Child Health, which offers maternity health services, increased 22%.
Beingmate, a major infant formula maker, rose 8% in Shenzhen. Goldlok Holdings, which makes electric trains and puppets, jumped 10%. Clothing maker Lancy rose 7%. Hong Kong’s Hang Seng (HSI) rose tifertilization Monday, while the Shenzhen Composite rose 1.1%.
New Policy Exists Since 2020 Population Census
The top leadership of the Chinese Communist Party, on Monday (31/5) made the decision to allow couples to have up to three children. Although it did not say when the policy changes would take effect.
The decision comes three weeks after Beijing published its 2020 census, which showed China’s population was growing at its slowest rate in decades. As a result, it raises concerns about the labor force reaping and economic stagnation.
China had previously imposed a “one-child policy” for more than 35 years as Beijing tried to tackle overpopulation and reduce poverty.
In 2015, the Chinese government announced that it was relaxing restrictions to allow up to two children per China family. But the country’s birth rate continued to fall by nearly 15% year-on-year through 2020.
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