China’s Births May Drop to Record Low in 2021, Jefferies Says

The number of babies born in China this year may drop to the lowest since at least 1950, according to Jefferies Financial Group Inc., one of the reasons why the government is cracking down on industries like education to bring down costs and promote bigger families.

An analysis of local government data showed that China’s newborns may have fallen by 17% in some regions in the first half of the year compared with the same period in 2020, researchers led by Simon Powell wrote in a note. Extending that drop to the whole country means “there is a risk that newborns might fall below 10 million in 2021,” they said.

The government has loosened restrictions on the number of children a couple can have and promised to boost support for families, including making it cheaper to raise a child. However, after dropping to 12 million last year, the number of newborns may decline again this year, Yu Xuejun, deputy head of the National Health Commission, said last month.

Read more: China’s Population on Track to Peak Before 2025 as Births Drop

Families are delaying pregnancy plans due to concerns over the safety of the Covid-19 vaccines and access to medical support during the pandemic and this is weighing on the number of new babies, the Jefferies analysts wrote. The demographic risk means there’s greater urgency to remove any barriers seen as adding to the living costs of a family and encourage childbirth, they said.

“The government is trying to make life easier, cheaper and less stressful” in the recent crackdown on the education and video gaming sectors, the Jefferies analysts wrote. “This effort will not be short-lived, and investors should be cautious.” 

(Bloomberg)

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