(Yicai Global) April 15 -- Stocks related to maternal and infant goods surged after China’s central bank published a document calling for an end to all birth restrictions to tackle the aging population issue by spurring the birthrate.

The People’s Bank of China released a working paper through its official WeChat account yesterday, saying that to achieve its long-term goals, “China should fully liberalize and encourage childbirth” as the country is facing a falling birthrate and rapidly ageing population. 

The PBOC paper prompted market speculation about future national policies to support sectors relevant to products and supplies for mothers and babies. The paper indicates that changes could come about in the near future, dairy products analyst Song Liang told Yicai Global. 

Shares in milk powder giant Beingmate Baby & Child Food [SHE:002570] rose by the 10 percent daily limit to close at CNY4.8 (73.6 US cents). J&F Labi Maternity & Baby Articles [SHE:002762] closed up 10 percent at CNY13.84 (USD2.10). Babemax [SHA:603214] surged 10 percent after the opening, but closed at CNY26.46 (USD4.05), up 4.8 percent.  

Following a continuous outflow of people from China’s northeastern regions in recent years, the National Health Commission said on Feb. 18 that the authorities could study how eased birth restrictions would influence the local economy, and it proposed a plan to pilot comprehensive fertility policies in the region.

The move triggered a rise in shares related to milk powder and mother and baby supplies and it also spurred speculation about an imminent lifting of China’s birth control policies. The National Health Commission denied the speculation on Feb. 21.

Those industries have been hit by a drop in the number of newborns in China since 2017. The number fell to 14.65 million in 2019 from 17.23 million in 2017. 

The PBOC’s paper also warned that the savings rate is declining too fast, which is a problem given the increasing financial burden of looking after the elderly. 

Editors: Xu Wei, Tom Litting