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Business Insight

Businesses Betting on Bigger Families

Akihiro Mikoda

Some companies in China are seeing a silver lining in the country's population woes. Officials have ended the country's decades-old one-child policy in a bid to boost a low birthrate, and businesses are hoping to cash in on the change in policy.

A recent auto show in Beijing attracted a large crowd. Since October's announcement that the one-child policy is ending, consumers are changing how they buy. Larger vehicles are increasingly popular. Roomier cars have enough space for an extra child seat, and any other items that might be needed with a second baby.

Gao Zhen, a sales manager at the company 4S explains, "young couples who plan a second child prefer this type of car. Since the announcement of the new policy, customers are increasingly interested in them."

The Chinese Communist Party hopes to push up the birth rate, but some experts say this will not be easy, citing high education costs and other problems.

Still, businesses are betting that China will produce more children. Advertisements such as "Three bedroom apartment ready to move in" have sprung up around Beijing. Most sales have been for two bedroom apartments, one each for parents and child. But demand is growing for an extra bedroom for the second baby.

One real estate agency in Beijing is trying to capitalize on the tailwind from the change in government policy. One apartment that recently went on the apartment boasts 140 square meters, two bathrooms and three bedrooms. Real estate adviser Cao Ruiyu says "it used to take us three to four months to sell big apartment like this, but they now get snapped up within half a month, or even a week."

Other businesses are following suit. Some have figured out that mothers with two children will need more help. A new software application lends a hand when kids get sick by providing online counseling. One thousand reputable doctors from Beijing, Shanghai, Guangzhou, and Shenzhen are available at a few swipes of a smartphone. The service has three million users, ranking it among China's top ten most downloaded apps.

The company that developed the app is trying to grow on the back of the change in government policy. Product manager Guanzhi Peng says "experts predict one hundred million babies will be born in the next five years. That will bring huge growth in our app."

The firm plans to develop a new version of the app, along with tailored services, such as doctors listed to deal with specialized medical situations.

It remains to be seen how the end of China's one-child policy will affect the world's most populous nation, but it is already bringing huge opportunities for business.

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