China’s plan to increase the birth rate through a condom tax and cheaper childcare

The Chinese will pay a 13% sales tax on contraceptives from January 1, while childcare will be exempt, as the world’s second-largest economy tries to increase the birth rate.

An overhaul of the tax system announced late last year removes many exemptions in place since 1994, when China still enforced its decades-old rules. one child rule.

It also exempts services related to marriage and elderly care from value added tax (VAT) – part of a broader effort that includes extending parental leave and providing cash handouts.

Faced with an aging population and a sluggish economy, Beijing is working to encourage more young Chinese to get married and couples to have children.

Official figures show China’s population has declined three years in a row, with just 9.54 million babies born in 2024. That’s about half the number of births recorded a decade ago, when China began relaxing its rules on the number of children allowed.

Yet the tax on contraceptives, including condoms, pills and birth control devices, has sparked concerns about unwanted pregnancies and HIV rates, as well as ridicule. Some people point out that it would take more than expensive condoms to persuade them to have children.

As one retailer urged shoppers to stock up before prices rise, one social media user joked: “I’m going to buy a lifetime’s worth of condoms now.”

People can tell the difference between the cost of a condom and the cost of raising a child, writes another.

China is one of the most expensive countries in which to raise a child, according to a 2024 report from Beijing’s YuWa Population Research Institute. Costs are increased by tuition fees in a highly competitive academic environment and the challenge women face balancing work and parenthood, the study found.

The economic slowdown, caused in part by a real estate crisis which hits savingshas left families, and particularly young people, uncertain or less confident about their future.

“I have a child and I don’t want any more,” said Daniel Luo, 36, who lives in the eastern province of Henan.

“It’s like when subway fares go up. When they go up by a yuan or two, people who take the subway don’t change their habits. You still have to take the subway, right?”

He says he is not concerned about rising prices. “A box of condoms can cost five yuan more, maybe 10, at most 20. Over a year, that’s only a few hundred yuan, very affordable.”

But the cost could be a problem for others, and that’s what worries Rosy Zhao, who lives in the central Chinese city of Xi’an.

She says making contraception, which is a necessity, more expensive could mean students or those struggling financially are “taking a risk.”

This would be “the most dangerous potential outcome of this policy,” she added.

Observers seem divided on the objective of the tax overhaul. The idea that higher taxes on condoms will impact birth rates is “overthinking,” says demographer Yi Fuxian of the University of Wisconsin-Madison.

He believes Beijing wants to collect taxes “wherever possible” as it battles a housing market crisis and rising national debt.

At almost $1 trillion (£742 billion), China’s VAT revenue accounted for almost 40% of the country’s tax revenue last year.

The decision to tax condoms is “symbolic” and reflects Beijing’s attempts to encourage people to raise China’s “incredibly low” standards. fertility figures, said Henrietta Levin of the Center for Strategic and International Studies.

What’s also hampering efforts, she adds, is that much of the policies and subsidies will have to be implemented by debt-ridden provincial governments – and it’s not clear they can devote enough resources.

China’s approach of encouraging people to have children also risks backfiring if people feel the government is “too intrusive” on what is a deeply personal choice, she said.

Recently, media reported that women in some provinces had received calls from local officials inquiring about their menstrual cycles and plans to have children. The local health bureau of Yunnan province said the data was needed to identify pregnant women.

But that hasn’t improved the government’s image, Ms. Levin said. “THE [Communist] The party cannot help but get involved in every decision that concerns it. So he ends up being his own worst enemy, in some ways. »

Observers and women themselves say the country’s male-dominated leaders fail to understand the social changes underlying these broader changes, which are not exclusive to China.

Western countries and even those in the region, such as South Korea and Japan, are struggling to increase their birth rates as their populations age.

This is partly due to the burden of childcare, which falls disproportionately on women, research shows. But there are other changes too, like a decline in marriage and even dating.

China’s measures miss the real problem: the way young people interact today, which increasingly eschews real human connections, said Henan’s Mr. Luo.

He points to the increase in sales of sex toys in China, which he says is a sign that “people are getting complacent” because “interacting with another person has become a burden.”

Being online is easier and more comforting, he says, because “the pressure is real.”

“Young people today face a lot more stress from society than they did 20 years ago. Of course, materially they are better off, but the expectations placed on them are much higher. Everyone is just exhausted.”