"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."
China imposed a 13% value-added tax on condoms, birth control pills and other contraceptives as part of efforts to raise a fertility rate of 1.0 children per woman. Services such as child care and matchmaking remain duty-free. The government allocated 90 billion yuan for a national child care program, including a one-off payment of about 3,600 yuan per child age three or under. Past pronatalist policies have failed to halt the decline; the fertility rate remains far below the 2.1 replacement rate. The contraceptive tax adds only a small monthly cost compared with estimated child-rearing costs around 538,000 yuan.
Read at Fortune
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