China is preparing to impose a 13% value-added tax on contraceptives beginning in January, a sharp policy reversal for a country that once relied on aggressive birth-control campaigns to limit population growth. The move, announced through revisions to the nation's VAT Law, comes as Beijing attempts to counter a deepening demographic decline, with births falling to 9.54 million in 2024-China's third consecutive year of population shrinkage and nearly half the level recorded in 2016. The new tax will apply to condoms and other contraceptive devices that have been exempt from VAT since 1993, during the height of the one-child policy.
The broader policy package pairs the tax with targeted exemptions for childcare, eldercare, disability services and marriage-related industries, signaling a shift toward reducing the costs associated with raising a family. The combination reflects escalating pressure on policymakers to respond to a rapidly aging population and one of the world's lowest fertility rates, estimated between 1.0 and 1.1-far below the replacement threshold of 2.1.
China's demographic crisis has accelerated since the full repeal of birth limits. Births have plunged from 18.8 million in 2016 to just 9.54 million in 2024, according to official reports, despite a series of pronatalist policies that include cash incentives, extended parental leave and government investment in childcare infrastructure.
Economic pressures remain a central factor. Research from the YuWa Population Research Institute estimates that raising one child to age 18 costs more than $76,000, making China one of the costliest countries for families. Weak job growth, high housing prices and shifting social expectations have contributed to young adults delaying or abandoning plans to have children. Demographer He Yafu told The Straits Times that eliminating the VAT exemption is "largely symbolic," noting that it does not address affordability but instead reflects an attempt to cultivate a more birth-friendly social environment.
The new contraceptive tax has quickly drawn criticism online. Some users on Weibo warned that higher prices could discourage safe sex practices at a time when HIV infections have risen from 0.37 per 100,000 people in 2002 to 8.41 in 2021, driven largely by unprotected sex. One commenter said the policy "might not be a good idea" amid rising infection rates, while another argued, "If someone can't afford a condom, how could they afford raising a child?" The public reaction highlights the tension between public-health priorities and Beijing's push to increase birth numbers.
International comparisons show that China's approach is unusual. Iran has previously restricted access to free contraceptives and sterilization procedures as part of its pronatalist programs, leading to higher rates of unplanned pregnancy and renewed debate over reproductive freedoms. Most countries facing severe fertility declines-including Japan, South Korea, Hungary and Poland-have opted for financial incentives such as subsidies, tax breaks and housing support, avoiding steps that could make contraception harder to access.
