China has implemented a new 13% value-added tax (VAT) on contraceptives, including condoms and birth control pills, as part of a broader tax reform. At the same time, the government has maintained VAT exemptions for childcare, elder care, and disability services. These changes mark a significant update to tax policies that had been in place since the one-child policy era in the 1990s.

The move comes as China faces a continuing decline in its population. Official statistics indicate that the country’s population has fallen for several consecutive years, with the 2024 birth rate approximately half of what it was a decade ago. The government has been actively encouraging young couples to marry and have children to address demographic challenges, including an aging population and a shrinking workforce.

However, the new tax on contraceptives has drawn widespread criticism. Health experts and social commentators argue that higher prices for condoms and birth control pills may not encourage more births and could limit access to safe contraceptive options for low-income individuals. Some warn that this could inadvertently increase the risk of unintended pregnancies and sexually transmitted infections among vulnerable populations.

Economic pressures remain a significant factor in China’s low birth rate. Rising costs of housing, education, and childcare, combined with intense work-life pressures on women, have made many young families hesitant to have children. A report from a Beijing research institute highlights that China is among the most expensive countries in the world to raise a child, citing high school fees and competitive educational environments as key challenges.

The new tax reforms have sparked debate over the government’s approach to population growth. While officials frame these measures as part of modernizing tax policy, some economists suggest they could also help increase government revenue amid a slowing economy and a real estate market crisis.

Social commentators note that younger generations face immense social and psychological pressures, contributing to delayed marriages and lower fertility rates. Despite material progress, the cumulative economic and social expectations have left many young adults feeling stressed and isolated.

China’s tax overhaul reflects a complex balancing act between fiscal policy, demographic concerns, and social welfare priorities. Experts caution that without addressing underlying economic and societal factors, the effectiveness of financial incentives, or disincentives like higher contraceptive taxes, on birth rates may be limited.