Once the most populous nation in the world, China is now among the many Asian countries struggling with anemic fertility rates. In an attempt to double the country’s rate, currently 1.0 children per woman, Beijing is turning to a new tool: taxes on condoms, birth control pills and other contraceptive methods.
Since January 1, these items are subject to a 13% value added tax. Meanwhile, services such as child care and matchmaking agencies remain tax-exempt.
The move comes after China spent 90 billion yuan ($12.7 billion) last year on a national childcare program that gives families a one-time payment of about 3,600 yuan (more than $500) for each child three years old or younger.
I have studied China’s demographics for nearly 40 years and know that previous attempts by the country’s communist government to reverse falling fertility rates through policies that encouraged couples to have more children have not worked. I do not expect these new measures to have much effect, if any, on reversing the decline in the fertility rate, which is among the lowest in the world and well below the 2.1 “replacement rate” needed to maintain a stable population.
In many ways, the 13% tax on contraceptives is symbolic. A pack of condoms costs about 50 yuan (about $7), and a monthly supply of birth control pills averages about 130 yuan (about $19). The new tax is not at all a major expense, adding only a few dollars per month.
Compare this with the average cost of raising a child in China, estimated at about 538,000 yuan (more than $77,000) until age 18, with the cost much higher in urban areas. A 36-year-old father told the BBC that he is not worried about the price increase. “A box of condoms can cost five yuan more, maybe 10, at most 20. In a year, that’s just a few hundred yuan, totally affordable,” he said.
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Failures of pronatalist policies
China is one of many countries that have adopted pronatalist policies to address low fertility. But they are rarely effective.
The Singapore government has been concerned for a couple of decades about the country’s very low fertility rate. It has tried to increase it through programs such as paid maternity leave, child care subsidies, tax breaks and one-time cash payments. However, Singapore’s fertility rate – currently at 1.2 – remains one of the lowest in the world.
The government even began limiting the construction of small one-bedroom apartments to encourage more “family-friendly” homes with two or more bedrooms—anyone with children will appreciate the need for more space, right? Still, even that failed to move the low fertility rate.
The Singapore government received help in 2012 from the candy company Mentos. In a viral advertising campaign, the brand called on citizens to celebrate “National Night” with some marital intimacy and “let their patriotism explode,” in the hope that there would be a corresponding increase in births nine months later. Even with help from the private sector, reversing the fertility decline appears to be a difficult task.
South Korea, the country with the lowest fertility rate in the world — 0.7 — has been offering financial incentives to couples for at least 20 years to encourage them to have more children.
The existing monthly allowance for couples who become parents increased. In fact, since 2006 the South Korean government has spent more than $200 billion on programs to increase the birth rate.
But fertility in South Korea has continued to fall: from 1.1 in 2006 to 1.0 in 2017, to 0.9 in 2019 and to 0.7 in 2024.
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Unfavorable headwinds
China’s situation is partly a consequence of its own policies. For a couple of decades, the one-child policy pushed fertility rates down. It worked, going from over 7.0 in the early 1960s to 1.5 in 2015.
That’s when the government intervened again, abandoning the one-child policy and allowing all couples to have two children. In May 2021, the two-child policy was replaced by a three-child policy.
The hope was that these changes would lead to a birth boom and significant increases in the national fertility rate. However, the rate continued to decline: to 1.2 in 2021 and to 1.0 in 2024.
While China’s historic programs to reduce fertility were successful, they were aided by broader social changes: these policies were in place as China modernized and moved toward an industrial, urbanized society.
Policies now aimed at increasing the birth rate face social headwinds. Modernization has led to better educational and employment opportunities for women, a factor that pushes many to delay motherhood.
In fact, most of China’s fertility decline, especially since the 1990s, has been voluntary: more a result of modernization than birth control policies. Chinese couples are having fewer children due to the higher cost of living and educational expenses involved in having more than one child.
Additionally, China is one of the most expensive countries in the world to raise a child relative to the average income. School fees at all levels are higher than in many other countries.
The ‘low fertility trap’
Another factor to take into account is what demographers call the “low fertility trap.” This hypothesis, put forward in the 2000s, holds that once a country’s fertility rate falls below 1.5 or 1.4—well above China’s current level—it is very difficult to increase it by 0.3 or more.
The argument is that fertility declines to such low levels are largely the result of changes in living standards and increased opportunities for women.
Consequently, it is highly unlikely that China’s three-child policy will have any effect on increasing the fertility rate. And all my years studying the country’s demographic trends lead me to believe that making contraceptives slightly more expensive won’t have a significant impact either.
*Dudley L. Poston Jr. is a professor of Sociology at Texas A&M University.
This article was originally published by The Conversation
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