China's two-child policy impact will be slow and small

Subject

The abolition of the one-child policy.

Significance

As of January 1 this year, the law permits all married couples in China to have two children, abolishing the 'one-child policy' in place since 1980 -- a move the government believes will increase the supply of labour and ease the pressures of an ageing society.

Impacts

• Abolishing the one-child policy will not be enough to address labour shortages and the problems of an ageing society.
• More births will soon boost consumption in areas such as food, clothing and education.
• In the short term, more births will increase the dependency ratio, which is already rising due to ageing.
• The net addition to China's population will be limited, and its economic impact will accrue only gradually over many years.