In its latest attempt to improve its rate of 1.0 children per woman, China has imposed taxes on condoms, birth control pills and other contraceptives as the world’s once most populous country grapples with anemic fertility.
As of January 1, The Conversation reports, these items were subject to a 13 percent value-added tax. On the other hand, services such as childcare and matchmaking remain duty-free.
This comes a year after China earmarked 90 billion yuan ($12.7 billion) for a national childcare program, giving families a one-off payment of about 3,600 yuan (over $500) for each child under three.
In a report, Dudley L Poston Jr, an award-winning professor of sociology at Texas A&M University, said he did not expect the new steps to have much, if any, effect on reversing the decline in the birth rate to one of the lowest in the world and well below the 2.1 “replacement rate” needed to maintain a stable population.
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Dudley has studied Chinese demography for nearly 40 years.
He said that in many ways the 13 percent tax on birth control is symbolic. “The new tax is not a big cost at all, it only adds a few dollars a month.”
For math: A pack of condoms now costs about 50 yuan (about $7), and a month’s supply of birth control pills averages around 130 yuan ($19). The average cost of raising a child in China is estimated to be around 538,000 yuan (over US$77,000) until the age of 18. Costs in urban areas are much higher.
In an interview with the BBC, the 36-year-old father was not concerned about the rise in condom prices. “A box of condoms may cost another five yuan, maybe 10, at most 20. More than a year, it is only a few hundred yuan, completely affordable.
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Adverse headwind
The Conversation noted that China’s predicament was partly self-inflicted — it pursued a one-child policy for decades to lower the birth rate, and it worked, from more than 7.0 in the early 1960s to 1.5 in 2015.
In 2015, the Chinese government abandoned the one-child policy and allowed couples to have two children. In May 2021, the two-child policy was abandoned in favor of a three-child policy.
The government hoped this would help create a baby-boom, leading to a significant increase in the national birth rate. However, the fertility rate continued to decline to 1.2 in 2021 and 1.0 in 2024.
Chinese politics over the years
The report noted that China’s historic birth-reduction programs were successful because they were aided by broader societal changes — policies were in place as China modernized and moved toward becoming an industrialized and urbanized society.
However, current policies aimed at increasing the birth rate run into adverse social headwinds – modernization has led to better educational and employment opportunities for women, a factor that forces many to delay having children.
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In fact, the expert said, most of China’s fertility reduction, especially since the 1990s, has been voluntary, the result of modernization rather than fertility control policies.
Chinese couples are having fewer children because of the higher cost of living and education costs associated with having more than one child, he noted.
Above all, he says, China is one of the most expensive countries in the world to raise a child, especially compared to the average income. Tuition fees at all levels are higher than in many other countries.
What is the “low fertility” trap.
The “low fertility trap,” coined by demographers in the 2000s, states that once a country’s fertility rate falls below 1.5 or 1.4 — much higher than China’s now — it is very difficult to raise it by 0.3 or more.
The argument is that the decline in fertility to these low levels is largely the result of changes in living standards and increasing opportunities for women.
Accordingly, the expert said that it is highly unlikely that China’s three-child policy will have any effect at all on increasing the birth rate. “And years of studying China’s demographic trends lead me to believe that raising the price of contraception will also have very little effect,” he said.
