Part 2: China Shifts on its One-Child Policy; Will It Be A Boon To Toy Makers?

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In my last posting, I provided a review of China’s one-child policy and its impact on China’s society and population.  China has decided to loosen that policy; will it be a boon to toy manufacturers?

My first reaction upon hearing the news was that we were going to see, in very short order, a doubling of China’s toy consuming population…but not so fast. According to CNN:  “The policy will be slightly relaxed so that couples will be allowed to have two children if one of the parents was an only child, Xinhua reported. Currently, both parents must be sole children to be eligible for a second child.”

According to a USA Today, “Easing of China policy may not result in baby boom,” that will result in somewhere between 15 and 20 million parents have an additional child.  That’s a drop in the bucket for a country with over 1.3 billion people.  As a result there will be no baby boom and the number of annual births, currently 16 million (the U.S. has just under 4 million births per year),  will increase by one to two million. 

So, here is what I think:  According to a speech delivered by Utku Tansel, Head of Toys and Games Research at Euromonitor International, at the World Congress of Play, China became the second largest traditional toy market in the world in 2012. 

That’s all we really need to know.  China is already a major growth opportunity for toy companies.  Adding one to two million births a year is nice but it does not provide a scale of growth that makes China any more appealing than it already is.                                                  

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