In China, the demographic crisis is even more acute, as the country’s labor population has decreased for three straight years. Last year, the nation only tallied 9.54 million births. This figure is about 25 percent of what it was a decade ago. This significant decline has prompted the Chinese government to take measures aimed at encouraging higher birth rates amid an ageing population and a sluggish economy.
In early 2024, the YuWa Population Research Institute based in Beijing announced some shocking findings. Yet they discovered that China is one of the most costly countries to raise a child. This financial burden places a heavy burden on young couples, with many even choosing to postpone or give up having children completely. Daniel Luo, a 36-year-old from Henan province. He’s got one kid and really thinks that economic hurdles make it impossible to have more.
In neighboring Yunnan province, local health authorities are taking proactive steps to avert further falling birth rates. They happen to be deeply inquiring into outcomes for expectant mothers. The federal government has long sought to provide a supportive environment for families by promoting marriage and childbirth to the new, younger generations. Soaring sales figures of sex toys suggest that women, and men for that matter, are choosing personal gratification over passing fling. This demographic change further complicates the landscape.
The Chinese government has announced a 13% sales tax on condoms. Their more ambitious strategy includes implementing this new tax starting on January 1, 2025. The price per box of condoms is from 5-20 yuan, which is within the range that many can afford. Unfortunately, this measure is mostly seen as symbolic. Yet what many argue is perhaps most concerning is that it is a pantomime of the government’s heavy-handed intervention in reproductive decisions.
As Yi Fuxian, a noted China demographer, has pointed out, this tax policy is unlikely to work. “The idea that a tax hike on condoms will impact birth rates is overthinking it,” he stated. He believes that people will continue making personal choices regardless of slight increases in costs, likening it to subway fare hikes:
“It’s like when subway fares increase. When they go up by a yuan or two, people who take the subway don’t change their habits. You still have to take the subway, right?”
This perspective highlights the fear that the government’s intrusion into individual choices might unwittingly undermine its objectives. As young Chinese people, especially those in urban centers, face heightened societal pressure, they are forced to contend with higher demands than their forbearers.
“Young people today deal with way more stress from society than people did 20 years ago. Sure, materially they’re better off, but the expectations placed on them are much higher. Everyone’s just exhausted,” said an anonymous observer familiar with the current social climate.
Now, the government has introduced a condom tax! They’re providing much-needed relief by exempting childcare services from sales tax. This strategy is intended to reduce the high costs of parenthood. Experts remain split on whether it’ll actually cause more people to have babies.
In the last fiscal year, China’s Value Added Tax (VAT) revenue accounts for almost 40% of the country’s domestic tax revenue. This remarkable figure amounted to nearly $1 trillion (£742 billion). This reliance on tax revenue has likely informed the government’s decision to impose taxes on contraceptives as part of broader fiscal strategies.
These experts caution that taxing personal items could backfire on households. If citizens perceive it as an intrusion into their private lives, the pushback will be fierce. The line between incentivizing people to have babies and valuing personal autonomy and freedom of choice is a very fine one.
