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China’s ongoing efforts to raise its birth rate have seemingly contributed to a surge in New Zealand’s top-performing stock.
The a2 Milk Company, a major New Zealand dairy producer whose products are popular with Chinese consumers, saw its shares climb to 43 percent, Bloomberg reported.
The implication is that investors anticipate a growing demand for infant formula and related products tied to potential demographic shifts in China, according to Bloomberg analysts.
Why It Matters
The news highlights how sweeping policy changes in China—boosting marriage rates and encouraging families—can create ripple effects for international consumer and export sectors.
China’s population decline and attempts to reverse it carry significant implications, not only domestically but also for global supply chains, trade and commodity markets. Analysts are watching whether China’s policy causes meaningful shifts in demand for foreign products—particularly in sectors such as dairy and baby nutrition, which rely on the country’s vast consumer base.
A stock photo of babies in St. Elisabeth and St. Barbara Hospital in Halle, Germany, in January 2011.
A stock photo of babies in St. Elisabeth and St. Barbara Hospital in Halle, Germany, in January 2011.
AP
What To Know
China’s population fell for a third consecutive year in 2024, with marriage registrations dropping to under 6.1 million couples, a decline from 7.68 million in 2023, according to China’s Ministry of Civil Affairs.
In response, China introduced new rules to streamline the marriage registration process, including removing the need for household registration books and allowing couples to register marriages outside their hometowns.
This change is particularly relevant in a society where, as of 2020, more than 490 million people live away from their registered hometowns, the national census showed.
Local governments have expanded incentives since 2021, including subsidies for children, extended maternity leave and housing support. In cities such as Hohhot, first-time parents can receive $1,400, with greater subsidies for subsequent children.
The New Zealand-based a2 Milk Company, which derives 68 percent of its revenue from China and other Asian countries, outperformed all other stocks on the benchmark S&P/NZX 50 Index, Bloomberg reported.
Jun Bei Liu, the founder and lead portfolio manager at Ten Cap in Sydney, named a2 as one of her top 10 stock picks.
“We should see a better birth rate in the latter part of this year to early next year, and the company is very well-positioned for that rebound,” she said, per Bloomberg.
What People Are Saying
Greg Smith, the head of retail at Devon Funds Management in Auckland, said: “[A2 Milk] has become a proxy for the amount of consumer stimulus effectively in China, which is by far their biggest and most important market.”
Commenting on China’s efforts to increase birth rates, Xiujian Peng, a senior research fellow at Victoria University’s Centre of Policy Studies in Melbourne, previously told Newsweek: “Without comprehensive reforms, these efforts may have only a marginal effect on reversing declining fertility trends.”
“International experience suggests that more comprehensive policies tend to be more effective. For example, France successfully increased its fertility rate from 1.64 in 1993 to 1.8–1.9 between the 1990s and 2010s, while Denmark saw a rise from 1.38 in 1983 to 1.7–1.8 over the same period.”
What Happens Next
The National People’s Congress is expected to address further proposals, which may lower marriage age minimums and eliminate limits on childbirth. Meanwhile, global investors and exporters remain watchful for further policy shifts and their direct effects on international trade flows and consumer markets.
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