China’s new condom tax will prove no effective barrier to country’s declining fertility rate

China’s fertility rates have plummeted to 1.0 children per woman. To combat this, the government has imposed a 13% tax on contraceptives, alongside child care incentives, but experts doubt effectiveness.

Once the world’s most populous nation, China is now among the many Asian countries struggling with anemic fertility rates. In an attempt to double the country’s rate of 1.0 children per woman, Beijing is reaching for a new tool: taxes on condoms, birth control pills and other contraceptives.

As of Jan. 1, such items were subject to a 13% value-added tax. Meanwhile, services such as child care and matchmaking remain duty-free.

The move comes after China last year allocated 90 billion yuan (US$12.7 billion) for a national child care program giving families a one-off payment of around 3,600 yuan (over $500) for every child age three or under.

I have studied China’s demography for almost 40 years and know that past attempts by the country’s communist government to reverse slumping fertility rates through policies encouraging couples to have more children have not worked. I do not expect these new moves to have much, if any, effect on reversing the fertility rate decline to one of the world’s lowest and far below the 2.1 “replacement rate” needed to maintain a stable population.

In many ways, the 13% tax on contraceptives is symbolic. A packet of condoms costs about 50 yuan (about $7), and a month supply of birth control pills averages around 130 yuan ($19). The new tax is not at all a major expense, adding just a few dollars a month.

Compare that to the average cost of raising a child in China – estimated at around 538,000 yuan (over $77,000) to age 18, with the cost in urban areas much higher. One 36-year-old father told the BBC he is not concerned over the price hike. “A box of condoms might cost an extra five yuan, maybe 10, at most 20. Over a year, that’s just a few hundred yuan, completely affordable,” he said.

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