China has introduced a 13 per cent sales tax on contraceptives from January 1, while exempting childcare services from value-added tax, as part of a renewed policy drive to reverse declining birth rates and address growing concerns about its rapidly ageing population.
The changes form part of a broader tax overhaul that dismantles several long-standing exemptions dating back to the era of the one-child policy. In addition to childcare, the reforms also provide tax relief for marriage-related services and elderly care, signaling Beijing’s intent to encourage family formation while adapting to new demographic realities.
Chinese authorities have been under increasing pressure to act as population figures continue to trend downward. Official data show that births in have declined for three consecutive years, with just 9.54 million babies born in 2024. This represents one of the lowest birth totals in the country’s modern history and underscores the scale of the demographic challenge facing the world’s second-largest economy.
Experts say the latest measures reflect urgency within policymaking circles, but remain divided over whether taxing contraceptives can meaningfully influence decisions around marriage and childbirth. Demographer of the questioned the logic behind the move, arguing that its impact on birth rates is likely to be marginal.
“The idea that a tax hike on condoms will impact birth rates is overthinking it,” Yi said, adding that fiscal considerations may also be driving the reform. According to official figures, value-added tax generated nearly one trillion dollars in revenue for China last year, making it a critical component of government finances at a time of slowing economic growth.
While policymakers frame the reform as part of a pro-family agenda, critics warn of potential unintended consequences. Some observers argue that making contraceptives more expensive could disproportionately affect students and low-income earners, increasing the risk of unplanned pregnancies without necessarily leading to stable family formation.
“Making contraception, which is a necessity, more expensive could mean students or those struggling financially take a risk,” said Rosy Zhao, a resident of Xi’an. On Chinese social media platforms, reactions have ranged from ridicule to concern, with many users questioning whether condom prices have any real bearing on decisions to have children.
For many young Chinese adults, the primary obstacle to starting families is not access to contraception but the high cost of living, especially childcare, housing, and education. Although childcare services have been exempted from tax under the new policy, critics argue that costs remain prohibitively high in major cities, where competition for quality care is intense.
Economists and sociologists also point to deeper structural pressures that tax adjustments alone may not resolve. Women, in particular, continue to face significant challenges balancing careers and parenthood, often at the expense of professional advancement. Rising property prices, stagnant wages in some sectors, and job insecurity among younger workers have further dampened enthusiasm for marriage and childbearing.
“Young people today deal with way more stress from society than people did 20 years ago. Everyone’s just exhausted,” said Daniel Luo, a resident of Henan province, reflecting a sentiment widely shared among China’s urban youth.
China’s demographic dilemma is not unique. Other ageing societies in East Asia, including and , have experimented with a wide range of incentives, from cash bonuses and housing subsidies to extended parental leave, yet continue to struggle with persistently low birth rates.
Analysts caution that symbolic or isolated measures, such as taxing contraceptives, are unlikely to reverse deeply entrenched trends without comprehensive reforms. These include making childcare genuinely affordable, promoting flexible work arrangements, tackling gender inequality in the workplace, and reshaping social expectations around marriage and parenting.
In recent years, Beijing has rolled out a series of pro-natalist policies, including tax deductions for families with children, expanded maternity benefits, and public campaigns promoting marriage. However, uptake has been limited, suggesting a disconnect between policy intent and lived realities.
Some observers see the latest tax changes as part of a broader recalibration, moving away from population control toward population encouragement. The removal of exemptions linked to the one-child policy era carries symbolic weight, marking a clear policy shift after decades of strict family planning.
Still, public response suggests skepticism remains high. Many citizens argue that without meaningful improvements in wages, housing affordability, and social welfare, policies aimed at nudging personal choices will continue to fall short.
As China grapples with the economic and social implications of an ageing population, including a shrinking workforce and rising healthcare costs, the stakes are high. Whether the latest reforms will have any measurable impact on birth rates remains to be seen.
For now, the debate highlights a broader truth confronting many advanced and emerging economies alike: reversing demographic decline requires more than tax tweaks. It demands sustained investment in families, structural reforms, and a rethinking of how societies support work, life, and parenthood in an era of rising pressures.
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