Key Takeaways:
- China will impose a 13% sales tax on contraceptives from January 1, while exempting childcare services from value-added tax (VAT)
- The move is part of a broader effort to boost birth rates in the world’s second-largest economy, which has seen a decline in population for three consecutive years
- The tax hike on contraceptives has sparked concern about unwanted pregnancies and HIV rates, as well as ridicule from some who believe it will not encourage people to have children
- China’s approach to urging people to have children has been criticized for being too intrusive and failing to understand the social changes underpinning the decline in birth rates
- The country’s male-dominated leadership has been accused of not addressing the burden of childcare, which disproportionately falls on women, and the decline in marriage and dating among young people
Introduction to China’s Tax Overhaul
China’s decision to impose a 13% sales tax on contraceptives from January 1 has sparked controversy and concern among its citizens. The move is part of a broader effort to boost birth rates in the world’s second-largest economy, which has seen a decline in population for three consecutive years. The tax overhaul, announced late last year, removes many exemptions that were in place since 1994, when China was still enforcing its decades-long one-child rule. While childcare services will be exempt from value-added tax (VAT), marriage-related services and elderly care will also be exempt, as part of a broader effort to encourage more young Chinese people to marry and have children.
The Impact of the Tax Hike on Contraceptives
The tax hike on contraceptives, including condoms, birth control pills, and devices, has sparked concern about unwanted pregnancies and HIV rates. Some people have ridiculed the move, pointing out that it would take more than pricey condoms to persuade them to have children. A social media user joked that they would buy a lifetime’s worth of condoms ahead of the price hike, while another pointed out that people can tell the difference between the price of a condom and that of raising a child. China is one of the most expensive countries in which to raise a child, according to a 2024 report by the YuWa Population Research Institute in Beijing. The economic slowdown, partly brought on by a property crisis that has hit savings, has left families, and especially young people, feeling uncertain or less confident about their future.
The Effectiveness of the Tax Overhaul
Observers appear divided on the aim of the tax overhaul, with some believing that the tax hike on condoms will not impact birth rates. Demographer Yi Fuxian from the University of Wisconsin-Madison believes that Beijing is keen to collect taxes "wherever it can" as it battles a housing market slump and growing national debt. Henrietta Levin from the Center for Strategic and International Studies believes that the move to tax condoms is "symbolic" and reflects Beijing’s attempts to encourage people to lift China’s "strikingly low" fertility numbers. However, she notes that a lot of the policies and subsidies will have to be implemented by indebted provincial governments, and it’s unclear if they can spare sufficient resources.
The Burden of Childcare and Social Changes
China’s approach to urging people to have children has been criticized for being too intrusive and failing to understand the social changes underpinning the decline in birth rates. The country’s male-dominated leadership has been accused of not addressing the burden of childcare, which disproportionately falls on women. Research shows that the burden of childcare is a major factor in the decline in birth rates, as women are often expected to balance work and parenting responsibilities. Additionally, there are other shifts, such as a decline in marriage and even dating, which are not exclusive to China. Countries in the West and even those in the region, such as South Korea and Japan, have been struggling to lift birth rates as their population ages.
The Need for a More Nuanced Approach
China’s measures to boost birth rates have been criticized for missing the real problem: the way young people interact today, which increasingly avoids genuine human connections. Daniel Luo, a 36-year-old from Henan, points to rising sales of sex toys in China, which he believes is a sign that "people are just satisfying themselves" because "interacting with another person has become more of a burden". He notes that young people today deal with way more stress from society than people did 20 years ago, and that the pressure is real. Being online is easier and more comforting, he says, as "the pressure is real". A more nuanced approach that addresses the social changes and burden of childcare is needed to encourage young people to have children and boost birth rates in China.
Conclusion
In conclusion, China’s decision to impose a 13% sales tax on contraceptives has sparked controversy and concern among its citizens. While the move is part of a broader effort to boost birth rates, it has been criticized for being too intrusive and failing to understand the social changes underpinning the decline in birth rates. A more nuanced approach that addresses the burden of childcare and social changes is needed to encourage young people to have children and boost birth rates in China. The country’s male-dominated leadership must take a more comprehensive approach to address the complex issues surrounding birth rates, rather than relying on symbolic measures such as taxing contraceptives. By doing so, China can work towards creating a more supportive environment for young people to start families and boost its declining population.
