Stocks of companies related to childbirth, child care and education surged on Monday following Beijing’s announcement of a major policy shift to allow couples in mainland China to have up to three children.

Goodbaby International Holdings, which sells kids’ products, saw its share prices on the Hong Kong Stock Exchange shoot up by nearly 30% from HK$1.91 (US$0.25), closing at HK$2.5. Jinxin Fertility Group Ltd surged by 17.5%, closing at HK$22.35. New Oriental Education & Technology Group went up by 5.4%, closing at HK$81.85.

Health-related companies listed as A-shares on Shenzhen’s exchange also benefited from the news. Share prices of Yihua Group rose by around 10% to 5.6 yuan (US$0.88). Jiangsu Aoyang Health Industry Co. Ltd. closed at 6.68 yuan, up by more than 10%.

The new policy, approved by President Xi Jinping in a politburo meeting on Monday, is a further expansion of the two-child limit that was set in 2016, a historic move to scrap the one-child policy that was enforced for decades to control the population. The new policy also came with supporting measures so that young couples can play a part in this key policy that fights against an aging population and maintains the strategic advantage of China’s manpower, the official Xinhua News Agency reported.

The policy change follows a steep decline in China’s birth rate. The release of China’s census in May was delayed for nearly a month after the Financial Times reported that the total population was less than 1.4 billion. However, China’s official data released showed a population of 1.41 billion, up by 5.38% or 72 million compared to 2010.

The birth rate, however, had declined significantly from 2016, according to a BBC report that cited figures from the China Statistical Yearbook. Around 12 million babies were born in 2020, well down from 18 million in 2016 and the lowest rate recorded since the 1960s.

China’s birth rate did not increase despite the relaxation of the one-child policy in 2016, and the further relaxation may still not be appealing to young couples. Mr. Ren, a parent of two living in Henan province, told Apple Daily that he would definitely not have a third child as there was no guarantee of employment.

Mainland China’s economy was challenging and not every family could handle such heavy economic pressure, he said. “Even if you do not buy a house, you cannot afford to raise children. The price is too high,” said Mr. Ren, adding that medical costs are heavy even for single people.

The financial pressures were much higher for those living in cities, as raising children has become a kind of a competitive sport, with young parents competing with each other on the kind of education or housing provided to their children, said Mr. Ren. “It’s not that I don’t want to have another child. I just dare not,” he said.

Many netizens reacted negatively to the new policy, posting online comments on discussion forums saying young people are reluctant to have children because of the high cost of living, housing problems and inadequate social benefits.

“This is not about having two or three children. Many young people don’t want to have kids at all,” wrote one netizen. “If the country can foot the bill for the third child until the age of 18, I may consider it,” wrote another netizen.”

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