Though still insisting on the one-child policy, Shanghai has stopped awarding couples who wish to remain childless, giving a hint that the city encourages them to contribute to increasing its population.

"This is because Shanghai has been confronted with a negative population growth in the past 11 years. Last year's rate was minus 3.24 percent," said, Xie Lingli, director of the Shanghai Population and Family Planning Commission.

The city has become China's first city to become an ageing society, with 2.55 million people aged 60 or over last year, representing 18.98 percent of its total population.

Xie said this will rise to 20 percent in 2005 and 33 percent in 2020.

"The ageing population has seriously challenged the city's economic and social development," she said.

It is estimated that in the next few decades, the city's population will not see much change, with a low birth rate, low death rate and low growth rate.

The director said the city will also cancel restrictions on when qualified couples can have their second baby.

That means if the couple meet the criteria to have a second baby, they can have it whenever they like, she said.

"There are many reasons that lead to young couples not having children. They do so not just to receive the award. But the measure shows the city's attitude," said Xie.

Local insiders said the move aims to alleviate the pressure of an increasingly ageing population on the city.

Ding Jinhong, director of the Institute of Population Research under East China Normal University, said that an ageing population will pose a major challenge to the city's social security system.

Xie revealed that major fluctuations in the number of births in the city have greatly affected the allocation of social resources and Shanghai's economic development.

Xie added that "according to the census," there will be major fluctuations in the future birth rate and in the numbers of people both in the city's education system and in its workforce.

The size of an average family in Shanghai is falling, according to officials. In 1949, a family had an average of 4.9 members. The number dropped to 3.1 in 1990 and 2.8 in 2000.

"However, Shanghai still has the largest population among Chinese cities, with the highest population density of 2,588 people per square kilometer," said Xie.

An irrational distribution of population exists, with 40,100 people per square kilometer within the Inner Ring Road and only 900 people per square kilometer in the suburbs.

(China Daily September 8, 2004)