China Imposes Condom Tax, Cuts Childcare Costs in Push to Raise Birth Rates

China has introduced a 13 per cent sales tax on contraceptives from January 1, while removing taxes on childcare services, as part of a policy shift aimed at reversing the country’s falling birth rates.

The changes form part of a wider tax overhaul that scraps exemptions dating back to the one-child policy era. In addition to taxing contraceptives, the reforms include tax relief for marriage related services and expanded exemptions for elderly care, signalling a broader attempt to reshape social behaviour through fiscal policy.

Demographers say the measures highlight Beijing’s growing urgency over population decline. Official data show that China recorded only 9.54 million births in 2024, marking the third consecutive year of decline.

However, experts have questioned whether taxing contraceptives will have any meaningful impact. Yi Fuxian, a demographer at the University of Wisconsin, Madison, said it was unlikely that higher condom prices would influence family planning decisions, adding that the policy may also be driven by revenue considerations, given that value-added tax generated close to $1 trillion last year.

Some observers have raised concerns about possible unintended consequences. Rosy Zhao, a resident of Xi’an, warned that making contraception more expensive could encourage risky behaviour among students or low-income individuals. Others have mocked the move online, arguing that high childcare and living costs remain the real deterrents to having children.

Economists also note that the policy may be out of step with social realities, particularly for women balancing careers and motherhood, as well as young people facing mounting pressures from high housing costs and slow wage growth. Daniel Luo, from Henan province, said today’s youth are dealing with far greater stress than previous generations, leaving many too exhausted to consider starting families.

China’s struggle mirrors challenges in other ageing societies such as Japan and South Korea, where birth rates continue to fall despite government incentives. Analysts say reversing the trend will likely require more comprehensive reforms addressing childcare affordability, work-life balance and broader economic pressures, rather than symbolic measures alone.