China allows couples to have up to three children, a big shift from the existing limit of two children.
The announcement comes after recent data showed a dramatic decline in births in the world’s most populous country.
The policy change will be accompanied by “supportive measures that are conducive to improving the population structure of our country and fulfill the country’s strategy of actively dealing with an aging population,” said the official Xinhua news agency after a Politburo meeting chaired by President Xi Jinping.
Under these measures, China will reduce education costs for families, increase taxes and housing benefits, guarantee the legal interests of working women and take action against “sky-high” dowries, it said.
It would also try to educate young people “about marriage and love”.
Beijing abolished its decade-long one-child policy in 2016 and replaced it with a two-child limit to avert risks to its economy from a rapidly aging population.
However, given the high cost of raising children in Chinese cities, this did not result in a sustained surge in births, a challenge that continues to this day.
Recent data showed that China had a birth rate of just 1.3 children per woman in 2020, which is comparable to aging societies like Japan and Italy, and well below the roughly 2.1 levels required for replacement levels.
“People are not being held back by the two-child limit, but by the incredibly high cost of raising children in China today.
“Housing, extracurricular activities, food, trips and everything else add up quickly,” Yifei Li, a sociologist at NYU Shanghai, told Reuters.
“In my view, raising the limit itself is unlikely to change anyone’s calculations in a meaningful way.”
Earlier this month, a once-a-decade census showed the slowest growth in population over the past decade since the 1950s, at 1.41 billion, fueling concerns that China would get old before it gets rich, as well as criticism that it had waited too long to handle the declining births.
“This is without a doubt a step in the right direction, but a bit timid,” said Shuang Ding, chief economist at Standard Chartered in Hong Kong.
“A fully liberalized birth policy should have been in place at least five years ago, but now it’s too late, even though it’s better late than never,” he said.