Foreign Media Concerns Chinese Dragon Year Baby Boomers in China

U.S. media reported on the 21st that the more relaxed government policies and the arrival of the Year of the Dragon will make the emerging baby boom in China bring unlimited business opportunities to domestic and foreign companies.

The article points out that as the world’s second-largest economy, China will experience a period of population growth from 2005 to 2020, and its birth rate will peak in 2016. According to data provided by the United Nations, by 2020, the total population of China will increase from 1.334 billion in 2009 to 1.388 billion.

Many families want their babies to be born in 2012 in the Chinese Year of the Dragon. Zhang Dekang, head of obstetrics and gynecology at the Prince of Wales Hospital in Hong Kong, said that because the year of the dragon represented by the Chinese emperor represents power and wealth, the baby's birth rate in the year of the dragon will increase by 5%.

Michelle Mark, a consumer analyst at BNP Paribas, said: “The baby boom in the year of the Dragon is almost certain that it will promote consumer demand for infant formula, diapers and baby clothes.”

The article said that as income levels increase, Chinese parents have more financial resources to spend on children. Last year, the post-tax income of urban households increased by 8% to 19,109 yuan per capita, which is almost twice as much as five years ago.

According to estimates from Euromonitoring, the baby food market in China will grow by 22% in 2011 to more than 680 billion yuan, and by 2015, it will double to 136 billion yuan.

Feng Dawei, analyst at CLSA Asia-Pacific Markets in Hong Kong, said that as more and more babies are born, many manufacturers have “been fully prepared to make a fortune in the baby boom”.

According to estimates by Euromonitor, the total sales of baby diapers will increase from 24.3 billion in 2011 to 28.4 billion in 2012.

● Local brand pressure The article pointed out that China's milk powder manufacturers and other baby product manufacturers will face fierce competition, because many consumers still believe that domestic brands are not trustworthy.

James Roy, a consultant with China Market Research Group, said, “For those who can afford it, they will obviously choose to import foreign brands.”