Birth and elderly care shares surged on Monday after China announced to loosen birth restrictions and allow couples to have a third child in a bid to boost dwindling fertility rates and prevent future pressure on China’s supply of labor.
Childcare and infant product related shares rose by 1.98 percent on Monday. The share price of Goldlok, a Guangdong-based toy company, rose by 10.11 percent as of trading close on the day, while infant food company Zhejiang Beingmate Technology Industry&Trade Co rose by 8.09 percent on Monday.
Likewise, elderly care shares also edged up on Monday. For example, shares of Yihua Enterprise (Group) Co also rose by 10.02 percent as of trading close.
Both child and aged care shares surged after China announced on Monday that domestic families can have three children, a major policy shift from the existing limit of two after recent national census data pointed toward a dramatic decline in births.
It’s a major, though not surprising policy shift as the country has been gradually reforming its birth policy that used to limit families for many years to only having a single child. The restriction was lifted in 2016 when couples were allowed to have a second child, though it did not reverse the country’s declining birthrate.
Yan Yuejin, research director at the Shanghai-based E-house China R&D Institute, told the Global Times on Monday that the third-child policy would bring benefits to a number of industries such as housing, education and infant nursery, and the government might also make some changes to financial loan and tax policies accordingly.