Couples now allowed three children as China moves to slow ageing population

China's ruling Communist Party has said it will ease birth limits to allow all couples to have three children instead of two in the hopes of slowing the rapid ageing of its population, which is adding to strains on the economy and society.

The ruling party has enforced birth limits since 1980 to restrain population growth but worries the number of working age people is falling too fast while the share over the age of 65 is rising.

That threatens to disrupt its ambitions to transform China into a prosperous consumer society and global technology leader.

A meeting of the party's Politburo decided "China will introduce major policies and measures to actively deal with the ageing population", the Xinhua News Agency said.

A ruling party meeting led by President Xi Jinping decided to introduce "measures to actively deal with the ageing population", the official Xinhua News Agency said.

It said they agreed that "implementing the policy of one couple can have three children and supporting measures are conducive to improving China's population structure".

Leaders also agreed China needs to raise its retirement age to keep more people in the workforce and improve pension and health services, Xinhua said.

Restrictions that limited most couples to one child were eased in 2015 to allow two, but the total number of births fell further, suggesting rule changes on their own have had little impact on the trend.

Couples say they are put off by high costs of raising a child, disruption to their jobs and the need to look after elderly parents.

China, along with Thailand and some other Asian economies, face what economists call the challenge of whether they can get rich before they get old.

The Chinese population of 1.4 billion was already expected to peak later this decade and start to decline.

Census data released on May 11 suggests that is happening faster than expected, adding to burdens on underfunded pension and health systems and cutting the number of future workers available to support a growing retiree group.

The share of working age people aged between 15 and 59 in the population fell to 63.3 per cent last year from 70.1 per cent a decade earlier, according to the census data.

The group aged 65 and older grew to 13.5 per cent from 8.9 per cent.

The 12 million births reported last year were down nearly one fifth from 2019.

About 40 per cent were second children, down from 50 per cent in 2017, according to Ning Jizhe, a statistics official who announced the data on May 11.

Chinese researchers and the labour ministry say the share of working-age people might fall to half the population by 2050. That increases the "dependency ratio", or the number of retirees who rely on each worker to generate income for pension funds and to pay taxes for health and other public services.

Leaders at yesterday’s meeting agreed it is "necessary to steadily implement the gradual postponement of the legal retirement age", Xinhua said.