No sooner has China reportedly put an end to its one-child policy, than a detailed report setting out the estimated economic impact has come to light.
Credit Suisse estimates the relaxed controls will result in between three and six million extra babies being born each year.
The annual cost of raising them is estimated at being equivalent to between four and six percent of China’s total retail sales.
More mouths to feed: that means less for families to spend on consumer goods.
“They may buy less iPhone and Samsung, they may buy a Xiaomi phone, the cheaper local version, one third the price and switch the budget maybe to that baby food product, maybe entertainment,” said Savio S. Chan, President and CEO of US China Partners.
The news about the country’s apparent change of direction sent shares in China Child Care Corp., makers of hair and skin products for children, soaring by 40 percent on the Hong Kong stock exchange.
However shares in Okamoto, a Japanese maker of condoms, much used by Chinese visitors to Japan – until now – slumped 10 percent.