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How you can profit from the impending baby boom in China

by , 12 November 2015

The Chinese government has finally scrapped its one child policy. This comes as the country faces an ever ageing population with a dwindling number of younger people to join the work force.

So does this present any investment opportunities?

Let's take a closer look…


China is raising its child policy to two

 
The government in China has announced that it is scrapping its one child policy and is now allowing couple to have two children.
 
The decision all comes down to demographics. With the country having such a low birth rate for over three and a half decades, it’s not going to have enough young people to join the workforce to support the growing number of elderly people.
 
The one-child policy led to the total fertility rate to halve. But as this is now at 1.5, this is below the 2.1 rate needed to keep the country’s population stable, Matthew Partridge in Money Morning UK explains.
 
Credit Suisse predicts that the increasing number of births from the revision of the policy could lead to an additional 6 million births annually from 2017.
 

How to profit from the rising population in China

 
The companies set to benefit from the new two-child policy in China are those catering to babies, young children and parents.
 
When news broke about what was happening in China, many child-related companies saw their share prices rise as a result.
 
One company worth looking at is Procter & Gamble [NYSE:PG]. A big revenue driver for the company is its Pampers nappies. Sales in more developed markets haven’t been growing much, but there is strong growth in the Chinese markets.
 
Not only that, P&G look set to benefit from a rise in demand for imported toiletries in China where local products have been criticised due to poor quality.
 
The company also trades on a decent dividend yield of 3.5%.
 
So there you have it. How you can profit from the impending baby boom in China.
 
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