Businesses engaged in baby products saw a surge in their stocks following the announcement that China was scrapping its one-child policy.

On Thursday, even before state media Xinhua officially announced Beijing's adoption of a two-child policy, baby-related stocks were starting to soar.  

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Goodbaby International, a manufacturer of strollers and car seats, saw its stocks rising by 7.4 percent. Formula milk producer Biostimes posted a 5.5 percent gain, while Beingmate Baby & Child Food stocks rose 4.8 percent.

It can be remembered that in 2013, when Chinese officials began relaxing the decades-old one-child policy and gave qualified parents the go signal for a second child, baby-related businesses such as those into diapers, infant formula and even pianos, also saw a surge in their stocks. The stock portfolio of contraception makers trended in the opposite direction.

The Wall Street Journal says the Chinese government was expecting a two million rise in population a year after it relaxed the one-child policy, but actual results showed that only 804,000 families were interested in having a second child as of September 2014.

An estimated 11 million families were qualfied to have a second baby when the government decided to allow them in 2013, but less than 10 per cent availed of the chance.

"From a political, pragmatic perspective, loosening the policy is good for the party but also it is a good thing for individual couples who want to have that second child. It is a kind of win-win for everybody," said Stuart Gietel-Basten, a demographer.

China's move to shift from one-child to two-child policy is in line with the country's aim "to balance population development and address the challenge of an ageing population."

TagsChina's one-child policy, two-child policy, baby-related stocks