"China has paid a huge political and social cost for the policy, as it has resulted in social conflict, high administrative costs, and led indirectly to a long-term gender imbalance at birth," Xinhua said, citing the report.
Many demographers argue that the policy has worsened the country's aging crisis by limiting the size of the young labor pool that must support the large baby boom generation as it retires. They say it has contributed to the imbalanced sex ratio by encouraging families to abort baby girls, preferring to try for a male heir.
But it remains unclear whether Chinese leaders are ready to take up the recommendations. China's National Population and Family Planning Commission had no immediate comment Wednesday on the report.
Known to many as the one-child policy, China's actual rules are more complicated. The government limits most urban couples to one child and allows two children for rural families if their first-born is a girl. There are numerous other exceptions as well, including looser rules for minority families and a two-child limit for parents who are themselves both singletons.
Cai Yong, an assistant professor of sociology at the University of North Carolina, Chapel Hill, said the report held extra weight because the think tank is under the State Council, China's Cabinet. He said he found it remarkable that state-backed demographers were willing to publicly propose such a detailed schedule and plan on how to get rid of China's birth limits.
"That tells us at least that policy change is inevitable," he said. "It's coming." Cai, who was not involved in the report, but knows many experts who were, is a visiting scholar at Fudan University in Shanghai.
Adding to the uncertainty is a once-in-a-decade leadership transition that kicks off Nov. 8 that will see a new slate of top leaders installed by next spring. Cai said the transition could keep population reform on the back burner or changes might be rushed through to help burnish the reputations President Hu Jintao and Premier Wen Jiabao on their way out.