Why China Is Failing To Boost Birth Rates

China has announced that it is bringing changes to some of its taxation laws. From January next year, according to the revised Value-Added Tax (VAT) Law, contraceptive medicines and devices, which include condoms, will be subject to 13 per cent value-added tax. This is the first time since 1993 that taxes are being levied on contraceptives.

This isn’t all surprising news. Beijing, which had for decades pushed its one-child policy ruthlessly, is worried about the rapidly plummeting fertility rates and what this could mean to the Chinese economy and culture. When it had relaxed its one-child policy, it had hoped for a rebound in births. Instead, its fertility rate has continued to plummet, falling to roughly one child per woman, which is among the lowest in the world. China’s population has shrunk for three years in a row, with only 9.54 million babies born in 2024. Compare this to 18.8 million births that took place in 2016, the year when talk of declining birthrates had led to the reversal of the one-child policy. At the current rate, some have estimated that China’s population will shrink to half its size by 2100.

Beijing has introduced multiple policies to overturn this trend and push people into having more babies. These include all types of incentives, generous parental leave policies, childcare allowances, to even direct (and substantial) cash handouts for families having second and third children in several regions. Even the latest legislation, while it introduces VAT on contraceptives, it has taken away VAT on childcare providers such as nurseries and kindergartens, along with businesses offering marriage-related services.

The panic over declining fertility rates is hardly just a Chinese one. Several countries are trying to stem the rate of declining childbirths. Even in India, several states who aren’t producing enough babies to replace the current population are encouraging and incentivising families to have more babies. Whether these work or not is another question.

In China, it is clearly not. Many now worry that the state may someday resort to more invasive tactics. It has already issued guidelines for instance to discourage abortions that it considers ‘not medically necessary’.

All this also points to the limits of social control. The state may be able to control dissent, both online and offline. It may be able to take away rights; or stop people, like it once did, from having more than one baby. But it cannot goad people to have more babies.