In a striking policy reversal, China has made contraception more expensive by scrapping long-standing tax exemptions on condoms and oral contraceptive pills. From January 1, these products now attract a 13% value-added tax, the standard rate for consumer goods. The decision highlights how seriously Beijing views its demographic crisis, marked by a shrinking workforce and a rapidly ageing population.
China’s population declined for the third straight year in 2024, while people aged 60 and above now account for over 20% of the population. Policymakers fear the country could “grow old before it gets rich”, putting pressure on public finances, healthcare systems and long-term economic growth. With fertility rates far below the replacement level of 2.1, boosting births has become a strategic priority.
The move also reflects the long shadow of the now-scrapped one-child policy, which shaped family choices for decades. Although China ended strict birth limits in 2016 and later allowed up to three children, these changes failed to trigger a baby boom. Social norms, delayed marriages and the high cost of raising children have proven hard to reverse.
In recent years, the government has rolled out multiple incentives — childcare subsidies, tax benefits, cash allowances and promises to reduce hospital delivery costs. Making contraception costlier fits into this subtle shift, discouraging child avoidance without returning to coercive policies of the past.
However, many young Chinese remain unconvinced. High housing prices, expensive education, job insecurity and long working hours continue to deter parenthood. The growing popularity of the DINK (double income, no kids) lifestyle and slogans like “We are the last generation” reflect a widening gap between state ambitions and personal choices.
While taxing condoms is unlikely to spark a baby boom on its own, it signals the urgency — and anxiety — within Beijing’s leadership. Whether symbolic measures and financial nudges can overcome deep-rooted economic pressures and changing social values remains the biggest question in China’s demographic gamble.
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