Will the Condom Tax Backfire? China's Bold Moves to Reverse Declining Birth Rates
As part of an ambitious plan to stimulate birth rates, the Chinese government is set to impose a 13% sales tax on contraceptives starting January 1, 2024, while exempting childcare services from taxation. This shift marks a significant departure from previous tax exemptions established during the era of the one-child policy, which was officially abandoned over a decade ago. Alongside taxing contraceptives, the government aims to promote marriage and parenthood through various strategies, including extending parental leave, providing cash handouts, and removing the value-added tax (VAT) on services related to marriage and elder care.
However, the rising tax on contraceptives has sparked concern about potential increases in unwanted pregnancies and higher rates of sexually transmitted diseases, like HIV. Critics argue that simply increasing the price of condoms won’t be enough to tempt young couples into parenthood in a society where child-rearing is already among the most expensive in the world. A recent report highlights that the costs associated with raising a child in China are inflating due to factors like soaring school fees and the struggle women face to balance work and parenting.
Current data reveals that China’s population has been declining for three consecutive years, with only 9.54 million babies born in 2024—about half the birth rate of ten years prior. For many young people, such as Daniel Luo, the tax increase may not significantly alter their decisions about having children. However, other young adults worry that financial pressures from higher contraceptive costs could push financially insecure individuals to take risks, potentially jeopardizing their futures.
Experts are divided regarding the effectiveness of these taxing policies. Some believe it reflects China’s need to boost tax revenues amid a housing market slump and rising national debt, while others, like Henrietta Levin, highlight the symbolic nature of this move as a way to address alarmingly low fertility rates. However, implementing supportive policies may face obstacles, especially since indebted provincial governments might struggle to provide adequate resources.
Moreover, recent reports of intrusive government inquiries into women’s menstrual cycles have raised alarm about the government’s overly assertive role in personal decisions, possibly alienating citizens.
Cultural shifts in personal relationships and declining marriage rates also complicate efforts to encourage childbirth. Many young people feel overwhelmed by the stress of modern life, leading to less desire for traditional relationships. As highlighted by Luo, increasing internet usage and the sales of sex toys illustrate how modern interactions are changing, with many opting for digital connections over face-to-face relationships.