The announcement came after the release of the results of the Seventh National Population Census, which showed that the number of births in mainland China in 2020 was only 12 million, the lowest number of births since 1960, and the further aging of the population, against which the policy was born.[5] This was the slowest population growth rate China experienced.[6]
Although the CCP government had high expectations for the new policy,[16] in a 2021 online poll conducted by the state media Xinhua on its Weibo account, using the hashtag #AreYouReady for the new three-child policy, about 29,000 out of 31,000 respondents stated they would "never consider it."[15]
It already has. Thats why its 36 years with "1 child" and only 6 years with "2 child" before it went to "3 child", they're deep in deficit and are trying to catch up.
Further the new "3 child" policy isn't just a passive allowance. The government of China is actively incentivizing parents to have children.
"An extra month off and $80 monthly stipends and 30-day days of additional leave part of a series of sweetners local governments have unveiled as China kicks off the legislative process to allow married couples to have a third child in a drive to curb a precipitous decline in births." source
While that's all relatively nice, it's also a bandage on a gash. The number one predictor of how high your country's fertility rate will go in a developed economy is access to affordable housing, and to tackle that, Beijing is gonna have to do some serious teeth gritting on the fact that right now housing is in a serious speculative loop, several people will buy units still under construction because it's seen as the safest way to store capital in the country, they went from a country that shot land lords to a country that's technically chalk full of them.
Incentives to have children will never, ever get you to your desired fertility rate. The problem is, if you take taxes and then give it to people that have kids, you're subsidizing having kids at the expense of those that don't. That means you need a large population of people not having kids to afford it, if everyone takes advantage of it then you'll wind up just taking peoples money and giving it back to them, which puts them right back where they were before your program.
Sure, we'll have to get over that in the short term - all countries that is, not just China - but in the long term, population degrowth is actually a good thing. It means humans will be less bad for the environment, we will each have more individual worth in terms of things like voting, and more resources will be available for each individual.
Because it would meant hat the CCP would have to retreat out of this particular part of life and give up a method of control and oppression, which a totalitarian party could never do.
A gradual decline in population is a good thing, so they probably don't want to overshoot too much. Also maybe the minorities pushed for keeping some restrictions.
From what I understand, the one child policy tanked their birthrate so much that the country is expected to never recover. Current economies are basically dependent on a growing population to support the elderly and retired members of the population. Countries can somewhat get by through immigration to prop up a low birthrate, but that can only take you so far.