China NPC: Three-child policy formally passed into law

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A girl rides on the back of a woman down an escalator at a shopping centre on International Children's Day in BeijingImage source, Getty Images

China has formally revised its laws to allow couples to have up to three children, to boost the birth rate.

The regulation was one of several passed on Friday at a meeting of the country's top lawmakers, the National People's Congress (NPC).

Details on a controversial anti-sanctions law for Hong Kong, which many businesses feared would put them in a difficult position, were also expected.

But Hong Kong media reported on Friday that the decision had been delayed.

What is the three-child policy?

China had announced back in May that it would allow couples to have up to three children, in a major policy shift.

That decision has now been formally passed into law, along with several resolutions aimed at boosting the birth rate and "reducing the burden" of raising a child, said Xinhua news agency.

These include cancelling the "social maintenance fee" - a financial penalty couples pay for having children beyond the limit, encouraging local governments to offer parental leave, increasing women's employment rights; and improving childcare infrastructure.

Recent census data had shown a steep decline in the birth rate.

In 2016, the country had scrapped its decades-old one-child policy to replace it with a two-child limit, but this failed to lead to a sustained upsurge in births.

The cost of raising children in cities has deterred many Chinese couples.

What about the anti-sanctions law?

This past week, global banks and financial institutions had been watching the NPC meeting closely for signs on how and when the controversial anti-sanctions law would affect Hong Kong.

China had already passed the law in June, and was expected on Friday to put it into Hong Kong and Macau's mini-constitutions, spelling out how it would be applied. Reports on Friday however quoted a lawmaker as saying this was delayed.

Under the law, companies in China are not allowed to implement foreign sanctions against Chinese individuals or entities. On top of that, they are required to help Beijing carry out retaliatory measures, and may face punishment if they refuse.

It was tabled after the US government imposed several rounds of sanctions on Chinese officials - including Hong Kong's leader Carrie Lam - over Beijing's crackdown on pro-democracy protests. In response, China imposed its own sanctions on US officials.

Experts say that under the law, banks and companies in Hong Kong could face legal risk for following US sanctions.

Hong Kong is a hub for many global financial institutions and the city state is a major source of profit for companies like HSBC and Standard Chartered.

"Hong Kong's attraction for many firms, especially international ones, was its relative insulation from intra-party rivalry and major power competition. Such a law would take away one of those important legs," said Ian Chong, a political science expert at the National University of Singapore.

"The cost and uncertainty of doing business in HK could increase substantially," he told the BBC.

Dr Chengxin Pan, an associate professor of international relations with Deakin University in Australia said China came up with the law because while it "doesn't want to unduly unsettle also doesn't want businesses to think it's normal and costless to have its cake and eat it too, by profiting from doing business in Hong Kong while carrying out sanction orders from Washington against Chinese interests."

"This no doubt will complicate the cost-benefit calculations, if not political loyalty, of business in Hong Kong, which could be caught in the geopolitical crossfire between the US and China."

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