China’s decision to allow families to have three children could produce a windfall for manufacturers of strollers, car seats and baby formula. At least that’s what investors think.
Stocks linked to baby products and maternity services soared in mainland China and Hong Kong on Monday after the Chinese government announced a major change in its family planning policy as the country tries to avoid a crisis. demographic.
Shares of Goodbaby, which makes children’s products, rose 31% in Hong Kong. Suzhou Basecare Medical Co., which offers genetic testing for couples seeking in vitro fertilization, increased 15%.
Jinxin Fertility Group, which provides assisted reproductive services, gained nearly 18%, while Aidigong Maternal & Child Health, which offers maternity health services, rose 22%.
Beingmate, a major infant formula manufacturer, was up 8% in Shenzhen. Goldlok Holdings, which makes electric trains and dolls, was up 10%. Clothing maker Lancy was up 7%.
Hong Kong’s Hang Seng Stock Index rose 0.1% on Monday, while the Shenzhen Composite appreciated 1.1%.
The new politics
At a meeting on Monday, the Chinese Communist Party leadership made the decision to allow the couples to have up to three children, although state media reports did not say when the policy change would be implemented.
The decision comes just three weeks after Beijing released its 2020 census, which showed China’s population was growing at its slowest rate in decades. That is putting great pressure on an economy that depends on a young workforce to support an aging population and maintain high levels of growth.
China’s one-child policy was in place for more than 35 years as Beijing tried to address overpopulation and alleviate poverty.
In 2015, the Chinese government announced that it would relax restrictions to allow up to two children per family. But the reversal failed to raise the country’s birth rate, which fell nearly 15% year-on-year in 2020.
Melissa Galbraith is the World News reporter for Globe Live Media. She covers all the major events happening around the World. From Europe to Americas, from Asia to Antarctica, Melissa covers it all. Never miss another Major World Event by bookmarking her author page right here.