Here is my family's story.

I am a Chinese with siblings. I have an elder sister. My parents are not among people who can have a second child back in 1994 when my sister was born. My mother was ready to have a birth-control operation because they never had intended to disobey that policy. However, my grandmother was really very conservative, she forced my parents to have a son and they gave in to her. They risked losing their jobs and a huge fine and gave birth to me in 1996. Later, my parents played with the loopholes in the policy and registered my sister as my aunt's daughter and avoided the punishment.

And back to your question. Disobeying the policy usually results in a fine. The amount of the fine was based on the income of the couple. Couples have to pay a fine of 20% of their annual income for a certain number of years for every extra child. Zhang Yimou, a famous director in China, was fined for 7 million yuan just last year. As you can see, this is not really binding as long as you really want to have more than one kid. Most of my parents' siblings and cousins have more than one child. What's different in my family's case was that my parents both were working for the government back then - my father was a teacher in a public high school and my mother was an accountant in a state-run mine. They would have been fired for giving birth to me.

Marco is not really right about this question. You can actually have as many children as you want as long as you are willing to bear the punishment. Forced abortion has never been officially adopted or there won't be me here answering your questions.

Well I would say the major problem now is quite on the contrary. People, especially in cities, are not willing to have many children because raising them is expensive. Our government is gradually deactivating limitations on births.