Beijing has announced it will restore a 30-year-old tax on contraceptive drugs and condoms in a bid to cut sales of contraceptives and thereby boost birthrates. The announcement follows a recent move to waive all hospital fees for child delivery.
China is struggling with a low birth rate, and despite Beijing’s best efforts to reverse the decades-long One Child Policy in 2016, many couples are choosing to not have children. Rising living costs, lack of confidence in the future and a weak employment market are all contributing to a general unwillingness to marry or have kids.
This is important for several reasons. One is that domestic consumption is a problem and the low birth rate directly impacts all products that relate to babies and kids. Babies are also future consumers, and an economy that is healthy has a healthy pipeline of consumers. Robots don’t consume.