China has taken a new step in its ongoing battle against low birth rates. The government now taxes condoms, birth control pills, and other contraceptives. This move aims to encourage more births as the country faces a severe fertility crisis.
A 13 Percent Tax on Contraceptives
Starting January 1, these items face a 13 percent value-added tax. The tax applies to products like condoms and oral contraceptives. In contrast, services such as child care and matchmaking remain free from duties.
This policy follows a significant investment last year. China allocated 90 billion yuan, about $12.7 billion, for a national child care program. Families received a one-time payment of roughly 3,600 yuan, over $500, for each child under three years old.
Experts Question the Impact
Professor Dudley L Poston Jr, a sociology expert at Texas A&M University, studies China's population. He has analyzed demographic trends for nearly four decades. Poston expresses skepticism about the new tax.
He believes it will have little effect on reversing the fertility decline. China's rate now stands at one of the world's lowest levels. It falls far below the 2.1 replacement rate needed for a stable population.
The professor calls the 13 percent tax largely symbolic. He notes it adds only a few dollars per month to contraceptive costs. For example, a packet of condoms costs about 50 yuan, roughly $7. A month's supply of birth control pills averages 130 yuan, around $19.
High Costs Deter Chinese Families
Raising a child in China requires substantial financial commitment. Estimates suggest an average cost of 538,000 yuan, over $77,000, to age eighteen. Urban areas see even higher expenses.
Many Chinese couples cite these costs as a major barrier. Educational fees and living expenses make having multiple children challenging. A 36-year-old father shared his perspective with the BBC. He said the condom price hike does not concern him much.
He explained that a box might cost an extra five to twenty yuan. Over a year, this amounts to just a few hundred yuan, which remains affordable for many.
Historical Policies and Modern Challenges
China's current struggles stem partly from past actions. For decades, the government enforced a strict one-child policy. This policy successfully reduced fertility rates from over 7.0 in the early 1960s to 1.5 by 2015.
In 2015, China shifted to a two-child policy. Then in May 2021, it allowed three children per couple. Officials hoped these changes would spark a baby boom and increase fertility rates.
However, the rates continued to drop. They fell to 1.2 in 2021 and reached 1.0 in 2024. Modern societal changes now work against pro-natal policies.
The Low-Fertility Trap
Demographers describe a "low-fertility trap" phenomenon. Once a country's rate drops below 1.5, it becomes very difficult to raise it significantly. China's current rate sits well below this threshold.
Professor Poston explains that fertility declines in recent decades result largely from voluntary choices. Modernization plays a bigger role than government policies. Women now enjoy better education and career opportunities, leading many to delay childbirth.
China ranks among the world's most expensive countries for raising children relative to average income. School fees at all levels exceed those in many other nations.
Unfavourable Headwinds Persist
The Conversation report highlights these persistent challenges. Past policies succeeded because they aligned with societal shifts toward industrialization and urbanization.
Today's efforts face strong headwinds. The expert concludes that the three-child policy likely will not influence fertility rates. Making contraceptives slightly more expensive also seems unlikely to make a meaningful difference.
China's demographic future remains uncertain as it grapples with these complex economic and social factors.
