China raises taxes on contraception: will it stop the demographic decline?
2 January 21:20
On January 1, China abolished the tax exemption for contraceptives that had been in place for more than 30 years. Condoms and birth control pills are now subject to a 13% value-added tax, the standard rate for most consumer goods.
This was reported by Reuters, according to "Komersant Ukrainian".
Why Beijing took this step
The decision was made against the backdrop of a protracted demographic crisis. In 2024, China’s population declined for the third year in a row, and experts estimate that this trend will continue.
The authorities are trying to change society’s attitude to marriage and fertility using not only financial incentives but also symbolic and regulatory steps. The abolition of tax incentives for contraception fits into this broader strategy to create an environment that, at least formally, does not encourage postponement of childbearing.
What other measures is China taking?
In recent years, Beijing has significantly stepped up its “pro-natalist” policies. In particular:
- in 2024, childcare subsidies were exempt from personal income tax;
- annual childcare payments were introduced;
- colleges and universities were encouraged to teach so-called “love education”, forming a positive image of marriage, family and parenthood;
- the program of international adoption of Chinese children was suspended for the first time since the early 1990s.
At last month’s annual Central Economic Work Conference, the government reiterated its commitment to maintaining “positive attitudes toward marriage and childbearing” as a key tool for stabilizing the population.
Will the tax policy work?
China’s demographic decline has deeper roots than the availability of contraception. The One Family, One Child policy, which was in place from the late 1970s until 2015, radically changed family patterns, and rapid urbanization has reinforced these changes.
This is compounded by high costs of childcare and education, labor market instability, and slowing economic growth.
The abolition of tax exemptions for contraceptives may have a symbolic rather than a practical effect. At the same time, the move demonstrates that Beijing is willing to reconsider even long-term social compromises to combat demographic decline, a problem that increasingly threatens the country’s economic growth and social stability.
