China’s plan to boost birth rates with condom tax and cheaper childcare

Chinese people will pay a 13 percent sales tax on birth control methods and child care services will also be exempt from Jan. 1 as the world’s second-largest economy tries to boost birth rates.

The tax system overhaul announced late last year removed many exemptions that had been in place since 1994, when China still enforced its decades-old one-child rule.

It also exempts marriage-related services and elderly care from value added tax (VAT); This is part of a broader effort that also includes extending parental leave and providing cash assistance.

Faced with an aging population and a stagnant economy, Beijing is doing its best to encourage more young Chinese to marry and couples to have children.

Official figures show China’s population has declined for three years in a row, with only 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 how many children people could have.

Still, the tax on birth control methods, including condoms, birth control pills and devices, has sparked ridicule as well as concerns about unintended pregnancies and HIV rates. Some people note that it will take much more than expensive condoms to convince them to have children.

One retailer urged shoppers to stock up ahead of the price hike, while one social media user joked: “I’ll be buying condoms for a lifetime now.”

Another wrote that people can tell the difference between the price of a condom and the price of raising a child.

China is one of the most expensive countries to raise children, according to a 2024 report by the YuWa Population Research Institute in Beijing. The research found that in a highly competitive academic environment, tuition fees are driving up costs, and so are the difficulties women face balancing work and parenting.

The economic slowdown, caused in part by the housing crisis that hit savings, has left families, and especially young people, feeling uncertain or less confident about their future.

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

“It’s just like the increase in subway prices. When it increases by one or two yuan, people who take the subway do not change their habits. You still have to take the subway, right?”

He says he’s not worried about the price increase. “A box of condoms might cost an extra 5 yuan, maybe 10, at most 20 yuan. Over the course of a year, that’s just a few hundred yuan, completely affordable.”

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

Making birth control, which is a necessity, more expensive, could mean students or those struggling financially are “taking risks”, he says.

This, he added, would be the “most dangerous potential consequence” of the policy.

Observers appear divided on the purpose of the tax overhaul. The idea that a tax increase on condoms would affect birth rates is “overthinking,” says Yi Fuxian, a demographer at the University of Wisconsin-Madison.

He believes Beijing is willing to collect taxes “wherever possible” as it struggles with a collapse in the housing market and rising national debt.

China’s VAT revenue was around $1 trillion (£742bn), accounting for around 40% of the country’s tax collections last year.

The tax on condoms is “symbolic” and reflects Beijing’s attempts to encourage people to remove China’s “strikingly low” tax Fertility figures, said Henrietta Levin of the Center for Strategic and International Studies.

What also hinders the effort, he adds, is that many policies and subsidies must be implemented by indebted state governments, and it is unclear whether they will be able to allocate sufficient resources.

China’s approach to encouraging people to have children risks backfiring if people feel the government is being “too intrusive” on deeply personal choices, he said.

Recently, there have been media reports that women in some provinces have received questions from local officials about their menstrual cycles and plans to have children. The local health bureau in Yunnan province said such data was needed to identify expectant mothers.

But Ms. Levin said this did not help the government’s image. ” [Communist] The party cannot help but involve itself in every decision it cares about. So in some ways he becomes his own worst enemy.”

Observers and women themselves say the country’s male-dominated leadership has failed to understand the social changes that underpin these broader changes, which are not unique to China.

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

Research shows that one reason for this is the burden of childcare that falls disproportionately on women. But there are other changes, such as the decline of marriage and even dating.

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

He believes the rising sales of sex toys in China are a sign that “people are just pleasuring themselves” because “interacting with another person has become a greater burden.”

He says it’s easier and more relaxing to be online because “the pressure is real.”

“Young people today face much more social stress than they did 20 years ago. They are better off financially, of course, but the expectations for them are much higher. Everyone is exhausted.”