The decision by the Chinese government to relax the rules on how many babies a family can have will have a profound impact on China.
This relaxation will bring 3 million to 6 million additional babies per year in the next five years from 2017, according to analysis by Credit Suisse.
This means a population boost of 17% to 33% from the current 16.5 million new-born babies per year, bringing the annual new born back to the 1990s level, Credit Suisse says in a note to clients.
This chart shows to steep increase in babies in China:
China has dropped its 35-year-old one-child policy, allowing all couples to have two children, effectively replacing themselves.
Previously, couples could only have two children if one of the parents was an only child.
Credit Suisse says the population boost will lead to increasing demand in baby formula, nappies, medication and kids’ wear.
This could translate into a 4% to 9% rise in retail sales in the short term.
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