China’s decision to end its one-child policy is likely to affect the country’s economy. Official Chinese media reported last month that all couples will be permitted to have two children.
The change in policy is expected to create new investments and increased demand for goods and services. The move comes as China’s economy is slowing. However, the change also may increase demand for higher pay and increase labor costs.
Speaking at a press conference Tuesday, Chinese officials predicted that the new policy would raise economic growth by about half of one percent. They said it would provide China with about 30 million laborers by 2050.
He Weiwen is with the Chongyang Institute for Financial Studies at Renmin University in Beijing. He says that more children will mean “more maternity homes, hospitals, kindergartens and schools. It will certainly result in massive investment in these areas.” “The two-child policy will also lead to more spending on the second child, and thus contribute to economic growth.”
