China plans to boost birth rate with condom tax and cheaper child care

People in China will pay a 13% sales tax on contraceptives from January 1, while childcare services will be exempted as the world’s second-largest economy tries to boost birth rates.

Reforms to the tax system announced late last year eliminated many exemptions that had been in place since 1994, when China still had a decades-old tax system. one child rule.

It also exempts marriage-related services and aged care from value-added tax (VAT) – part of a wider effort that includes extending parental leave and handing out cash benefits.

Faced with an aging population and a sluggish economy, Beijing has been trying to encourage more young Chinese to get married and have children.

Official data shows that China’s population has been declining for three consecutive years, with only 9.54 million babies born in 2024. That’s about half the number of births a decade ago, when China began to relax rules on the number of children it can have.

Still, taxes on contraceptives such as condoms, birth control pills and contraceptive devices have prompted concerns and ridicule about unintended pregnancy and HIV infection rates. Some pointed out that it would take more than expensive condoms to convince them to have children.

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

Another wrote that people could tell the difference between the price of condoms and the price of raising a child.

China is one of them most expensive country In a highly competitive academic environment, tuition fees and the challenges women face in work and childcare drive up costs, the study said, according to a 2024 report from Beijing’s Yuwa Population Research Institute.

The economic slowdown is partly due to Housing crisis hits savingsleaving families, especially young people, feeling uncertain or less confident about their futures.

“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 the subway fare has increased by one or two yuan, but people’s habits of taking the subway haven’t changed. You still have to take the subway, right?”

He said he’s not worried about rising prices. “A box of condoms may cost an extra five yuan, or ten yuan, or at most twenty yuan. It only costs a few hundred yuan a year, which is completely affordable.”

But for others, cost may be an issue, which is what worries Rosy Zhu, who lives in Xi’an, central China.

She said birth control pills were a necessity, but higher prices could mean “taking risks” for students or those with financial difficulties.

She added that this would be the policy’s “most dangerous potential outcome.”

Observers appear divided over the goals of tax reform. Fuxian Yi, a demographer at the University of Wisconsin-Madison, said the idea that raising condom taxes would affect birth rates is “overthinking.”

He believes Beijing is keen to tax “as much as possible” as it grapples with a sluggish property market and rising national debt.

Last year, China’s VAT revenue was close to $1 trillion (£742 billion), accounting for nearly 40% of the country’s tax revenue.

Move to tax condoms has ‘symbolic significance’ and reflects Beijing’s attempt to encourage people to raise China’s ‘alarmingly low levels’ Henrietta Levin of the Center for Strategic and International Studies said the fertility data.

Another factor hampering efforts is that many policies and subsidies must be implemented by heavily indebted provincial governments, and it’s unclear whether they will be able to free up enough resources, she added.

China’s push for people to have children could also backfire if people feel the government is “too intrusive” on personal choices, she said.

Recent media reports claim that women in some provinces have received calls from local officials asking about their menstrual cycles and fertility plans. The local health bureau in Yunnan province said such data is needed to identify pregnant women.

But that hasn’t improved the administration’s image, Ms. Levine said. “(The Communist Party) can’t help but get involved in every decision it cares about. So in some ways it ends up being its own worst enemy.”

Observers and women themselves say China’s male-dominated leadership fails to understand the social changes underpinning these broader shifts, which are not unique to China.

Western countries and even countries in the region such as South Korea and Japan have been trying to increase birth rates as their populations age.

Research suggests part of the problem is the burden of childcare, which falls disproportionately on women. But there are other changes, too, such as a decline in marriage and even dating.

Mr Luo, from Henan, said China’s measures ignored the real problem: The way young people interact today increasingly avoids real human connections.

He points to the rise in sex toy sales in China, which he believes shows “people are just satisfying themselves” because “interacting with others has become a burden.”

It’s easier and more comfortable to be online because “the pressure is real,” he said.

“Young people today are under more social pressure than they were 20 years ago. Sure, they are materially better off, but the expectations on them are much higher. Everyone is exhausted.”