Photo: CFP

Having a child changes everything in a woman's life, including how she spends her money.

Wang Zhiyuan, a 31-year-old woman living in Beijing, used to spend lavishly on luxury items for herself. She never skimped on high-end cosmetics, clothes and handbags and would spend around 2,000 yuan ($330) on them on average each month.

She and her husband lived comfortably on a total monthly income of 30,000 yuan, paying 8,000 yuan a month for domestic expenses and putting 5,000 yuan toward the mortgage on their second home, which they bought as an investment.

"But I've cut my spending on luxury items since I had a baby almost two years ago and now I'm trying to save as much as I can for future use," Zhang said.

Zhang has channeled the money into buying milk powder, diapers, baby clothes and toys and spends an average of 3,000 yuan a month on her 19-month-old daughter.

"The expenses for my daughter will continue to grow as she grows. These include at least 3,500 yuan a month for a kindergarten tuition fee and a certain amount of money to send her to various children's hobby classes," Zhang said.

The bills could also double as she is considering having another baby two years from now, because Wang and her husband are eligible to have another child under a new policy released last month. 

New policy

China is set to loosen its decades-old one-child policy by allowing couples to have a second child if one spouse is an only child, according to a decision made at the Third Plenary Session of the 18th Communist Party of China Central Committee, which concluded on November 12.

The one-child family planning policy mainly targets Han people. Previously, having a second child was limited to parents who were both only children, situations where the first child was disabled, or in rural families when the first child was a girl.

The policy will affect between 15 million and 20 million couples in the country, especially those in cities, Zhai Zhenwu, a professor of demographics at Renmin University of China, told the Global Times Monday.

Among couples who are eligible under the new policy, between 60 and 70 percent of them intend to have a second child, Zhai said.

This means the new policy could lead to around 13 million newborn babies within the next four or five years and around 2 million each year, he noted.

According to a list that circulated on Weibo in July and that was widely reported on, Beijing is the most expensive city in China in which to raise a child until they graduate from college. This costs 2.76 million yuan on average in Beijing, just above the 2.47 million yuan it costs in Shanghai, according to the list.

"Around 2 million newborn babies each year under the new policy is not a large figure at the national level, but there will be a baby boom in the next four or five years thanks to the policy, putting pressure on public services such as kindergartens and hospitals," Zhai said.

Growing up

The relaxation of China's one-child policy is good news for maternal and child-related sectors, which are already flourishing as a growing number of well-off Chinese parents spare no effort in investing in their only child.

Even sectors that are not directly related to children, like the real estate market, are expected to get a boost.

"The new policy will stimulate demand for bigger homes, such as homes with three or four bedrooms," Zhang Haiqing, director of Centaline Property Research Center in Shanghai, told the Global Times Monday.

On November 18, when the stock market reopened after the news of the relaxation of the one-child policy, shares jumped in child-related companies including dairy, toy and educational firms.

Investors anticipate good returns from these firms and even refer to them as "second-child concept stocks."

Sales of maternal and infant products through B2C online platforms topped 90 billion yuan in the third quarter of the year, up 160.3 percent from the same period of 2012, according to a survey released by Beijing-based EnfoDesk Analysys International on December 5.

The overall maternal and infant product market is expected to increase by 112.5 billion yuan by 2019, Investor Journal reported on November 25.

In the toy market, for example, sales of traditional toys reached 48.5 billion yuan in 2012, and will continue to rise by an annual average of 0.6 percent in the next three years, the report said, citing data from Euromonitor and CITIC Securities.

But the infant formula manufacturers are likely to be the biggest winners. China's infant formula market is expected to double to $25 billion in 2017 from $12 billion in 2012, according to Euromonitor, which compiled the data before the policy announcement. 

According to statistics released in August by UNICEF, only 28 percent of babies under 6 months old in China are breastfed, below the world average of 40 percent.

The change of China's one-child policy could boost the country's infant formula market by between 5 billion and 10 billion yuan in the next few years, Song Liang, an industry analyst with the Distribution Productivity Promotion Center of China Commerce, told the Global Times Monday.  

"But the domestic formula brands are likely to benefit more from the policy change if they can manage their quality well, because more babies will be born in the third- or fourth-tier cities where domestic brands dominate," Song noted. 

"There is a wide range of factors that will drive growth in China's dairy consumption over the coming years. Changes to the one-child policy may drive growth in pediatric formulas though there are other key trends as well," Kelvin Wickham, president of Fonterra Greater China & India, told the Global Times Monday in an e-mail.

"One of the key challenges will be ensuring there is a strong supply of quality milk to meet the growing demand," Wickham said.

A senior executive at a domestic formula brand who declined to be named remained cautious about the immediate effect of the policy change.

"It will take time for the new policy to be implemented nationwide and there won't be a big baby boom in large cities because of the policy. Third-tier cities will be a battlefield for both domestic and foreign formula brands," the executive said.