The Prof G Pod: China Decode

Episode: Why China’s Baby Bust Meets a Condom Tax

Date: December 16, 2025
Hosts: Alice Han, James Kynge
Special Guest: Chris Miller (Professor of International History at Tufts University, author of “Chip War”)

Episode Overview

This episode dives into three headline-grabbing themes shaping China’s present and future: the surprising softer tone of Trump’s new National Security Strategy toward China, a drastic and symbolic policy move on China’s “baby bust” through a new condom tax, and the major policy reversal on AI chip exports explored in-depth with guest expert Chris Miller. The discussion weaves current events with deep structural analysis on demographics, technology rivalry, and the evolving US-China relationship.

1. Trump’s New “Dovish” National Security Strategy Toward China

Timestamps: [02:08] – [19:09]

Key Points

• The Trump administration’s new National Security Strategy takes a notably softer line on China compared to previous years, omitting phrases like “great power competition” and downplaying the Taiwan issue.
• The document emphasizes economic rivalry rather than treating China as a military and ideological adversary.
• Chinese media and think tanks appear pleased with the shift, signaling a possible detente or at least a tactical pause.
• Discussion of supply chain vulnerabilities, specifically rare earth minerals, suggests the US is seeking time to shore up its own capabilities before taking a more aggressive stance.
• There is still policy space for tariffs and non-tariff trade barriers—“the doves have won the argument for now,” but hawkish elements remain present.

Memorable Quotes

“Trump is focusing more on doing deals and a lot less on American ideals for the world… we've left that Reagan-esque type of America as a shining city on the hill, a beacon for mankind, an ideal for global aspirations, the leader of the free world. … Now we're just talking about doing better deals.”
— James Kynge [13:22]

“China really feels like it has a bit of a victory lap because the Trump administration isn’t firing full cylinder on China.”
— Alice Han [07:10]

Notable Discussion

• Taiwan Issue: Mentioned only three times vs. eight in 2017 strategy ([06:15]).
• Supply Chain Strategy: Focus on rare earth minerals and efforts to shift supply chains away from China, noting US vulnerability ([09:00]), requiring “at least five years” to achieve meaningful independence.
• Latin America: Surrogate battleground referenced as “countering non-hemispheric influences”—shadowing Chinese influence in the region ([12:22]).

2. Trump’s AI Chip Reversal: Special Interview with Chris Miller

Timestamps: [21:47] – [38:17]

Key Points

• The Trump administration is reversing export controls, allowing Nvidia to sell H200 AI chips (second most powerful) to China.
• The rationale is split: economic benefit for key US firms like Nvidia, and belief that allowing sales could slow China’s need to ramp up its own chip ecosystem.
• Despite progress, China’s chip manufacturing capability (especially via SMIC) lags about five to six years behind Taiwan’s TSMC; on design, the gap is smaller, but manufacturing bottlenecks persist.
• The US’s decision may have less impact than headlines suggest: volumes of chips exported are likely to be limited by both US security checks and the Chinese government’s desire to protect Huawei and other domestic players.
• The decision highlights continued US compute advantage, crucial for AI leadership.

Memorable Quotes

“If your AI supply chain requires disassembling, smuggling, and reassembling, you know, that’s not the kind of supply chain you want to rely on to produce your most sensitive and advanced technology.”
— Chris Miller [31:47]

“I think there are two rationales… The first is financial. Nvidia…a driver of the stock market…The second argument is if you sell chips to China, China won’t want to build out its own AI chip ecosystem.”
— Chris Miller [24:21]

Notable Discussion

• Chip Market Comparisons: More Threads IPO valued at $50 billion is impressive, but still “only 1% of Nvidia’s valuation” given manufacturing constraints ([27:52]).
• AI “Bubble”: Chris Miller is “optimistic” the investment surge isn’t a classic bubble, as there’s ongoing transformative potential ([33:57]).
• AI Diffusion: US expected to outperform in enterprise AI adoption, but not to underestimate Chinese tech sector’s capacity ([34:36], [36:01]).
• Military Uses: Immediate dual-use applications include intelligence analysis and autonomous drones, with Ukraine-Russia conflict cited as a live testbed for such technology ([36:34]).

3. China’s “Condom Tax” & The Baby Bust Crisis

Timestamps: [38:59] – [51:59]

Key Points

• China will impose a 13% VAT on condoms and contraceptives starting January, removing a 33-year exemption established during the one-child policy era.
• Simultaneous cuts to taxes on matchmaking services suggest a broader government push to boost birth rates as China’s fertility rate plunges to about 1 birth per woman—far below replacement.
• Hosts blend personal stories (Alice’s family’s generational shifts) with macro data: marriage rates halved since 2013, rising cost of raising a child estimated at $76,000—13x per capita GDP.
• Deep cultural, economic, and gender-role trends (less willingness among women to marry/have children, pressure from high costs, glorification of the single woman) driving the crisis, not just policy.
• Experts and public are skeptical that taxing contraceptives will have any effect. Instead, comparisons made to the more generous family-leave and childcare support in Scandinavian countries as a more effective approach.

Memorable Quotes

“Although the authorities…have not said that this tax on contraceptives…is part of its pro-natal policies, it certainly looks like that…”
— James Kynge [39:44]

“Our generation of cousins in China—none of us have kids yet. And so it’s a great consternation to my grandfather who’s 95 in Shanghai, and hope he’s listening to this because every time I see him, he says, ‘Why don’t you have kids yet?’”
— Alice Han [41:52]

“If demography is destiny, I think China may be in a worse position than the U.S.”
— Alice Han [47:08]

Notable Discussion

• Population shrinkage: By 2040, elderly (60+) will exceed 400 million; China’s total population expected to fall by 150 million by 2050 ([46:06]).
• Rising economic burden is rationalizing the shift: childrearing now an “enormous financial burden,” leading to fewer or zero children per family ([47:08]).
• The persistence of structural drivers (housing, cost of education, work-life balance) threatens long-term growth and debt sustainability in China.

4. Weekly Predictions

Timestamps: [49:21] – [51:59]

James Kynge’s Prediction

• Domestic Chinese robot makers will surpass 60% market share this year, up from 57%—reflecting tech self-sufficiency and labor shortage adaptations ([49:26]).

Alice Han’s Prediction

• China’s real estate slump will drag well into 2026, with little sign of a bottom and Beijing remaining hesitant to bail the sector out comprehensively ([50:42]).

Notable Quotes Recap

• “Trump is focusing more on doing deals and a lot less on American ideals…” – James Kynge [13:22]
• “I think that your phrase ‘non-hemispheric influences’ is going to be a Zeitgeist for 2026.” – James Kynge [14:22]
• “Our generation of cousins in China—none of us have kids yet…” – Alice Han [41:52]
• “If your AI supply chain requires disassembling, smuggling, and reassembling…that’s not the kind of supply chain you want to rely on.” – Chris Miller [31:47]

Episode Flow and Tone

The episode mixes sharp analysis with accessible storytelling, blending macroeconomic realities with on-the-ground anecdotes (especially about China’s demographic challenges). The tone throughout is informed and skeptical but never alarmist, aiming to decode complex policy moves for a broad audience.

Summary Table of Important Timestamps

| Segment | Start | End | |-----------------------------------------------|----------|----------| | Trump’s National Security Strategy | 02:08 | 19:09 | | AI Chip Reversal Interview (Chris Miller) | 21:47 | 38:17 | | China’s Condom Tax & Demographic Analysis | 38:59 | 51:59 | | Weekly Predictions | 49:21 | 51:59 |

For Listeners Who Missed the Episode

This episode will get you up to speed on:

• The US’s evolving, more pragmatic China policy under Trump, prioritizing economics over confrontation.
• The deeper stakes behind the latest AI chip export news and what it means for the tech gap.
• The desperation (and futility) of polices like the new “condom tax” as China faces a demographic precipice.
• Personal, cultural, and structural dimensions animating both the economic rivalry and social anxieties that define China’s outlook.
• Predictions on Chinese technological adaptation and the persistent drag from the real estate sector.

The bottom line: Whether it’s geopolitics, tech rivalry, or family planning, nothing about China’s future is simple—but plenty is urgent.