Year of the Dragon May Give China's Economy a Lift

Smart executives know how to read business cycles. In China, some businesses also play close attention to demographic ones—especially the traditional spike in births associated with the Year of the Dragon, which starts on Jan. 23. More women in the world’s most populous nation are expected to try to time their pregnancies to fall in a year that the Chinese zodiac calendar associates with wealth and power. And the trend could be more pronounced this time, given the Chinese government’s more relaxed policies on family size. That may mean higher demand for infant and toddler products in the years ahead. Explains Michele Mak, a consumer sector analyst at BNP Paribas: “The dragon year baby boom is almost a sure thing, which will boost the demand for infant products such as baby formula, diapers, and clothes.”

Five percent more babies are typically born in a dragon year—the last one was in 2000—because many parents want their progeny to be associated with the icon of China’s emperors, says Tak-Hong Cheung, who runs the obstetrics and gynecology department at Prince of Wales Hospital in Hong Kong. That baby bump will add fuel to population growth that’s already expected to reach 1.388 billion by 2020, up from 1.334 billion in 2009, according to the United Nations.