China's Struggling Birth Rate: The Impact of New Contraceptive Tax

China is grappling with a significant demographic crisis as its birth rate continues to decline. Following the end of the one-child policy in 2016, the country has seen its population shrink for three consecutive years, with only 9.54 million births recorded in 2024—approximately half the number from 2016. The United Nations projects that China's population could plummet from 1.4 billion today to 633 million by 2100, raising concerns about an ageing society and economic sustainability.

The Straits Times

In an effort to reverse this trend, the Chinese government introduced a 13% value-added tax on contraceptives, including condoms and birth control pills, effective January 1, 2026. This tax marks a significant shift in policy, as contraceptives had been exempt from such taxes since 1994, during the enforcement of the one-child policy. While the government has also rolled out incentives like childcare subsidies and extended parental leave, critics argue that the contraceptive tax does not address the underlying issues deterring couples from having children.

Daily MailChina’s Contraceptive Tax and the Hard Limits of Pro-Birth Policies – GKTodayThe Sun - USThe Straits Times'Not about condoms': Chinese shrug off contraceptive taxChina taxes contraceptives by 13% to boost birth rate

Young couples in urban areas, such as Beijing, express skepticism about the effectiveness of the contraceptive tax. Many cite economic pressures, including high housing costs and job insecurity, as primary reasons for delaying or opting out of parenthood. A Beijing resident, identified as Jessica, stated, “The immense pressure on young people in China today—from employment to daily life—has absolutely nothing to do with condoms.” Similarly, 29-year-old Wang Zibo noted that he and his wife are postponing having children until the economy stabilizes, despite feeling financially secure.

The Straits Times

Experts highlight that the high costs associated with raising children in China, combined with a weak job market and a demanding work culture, are significant deterrents to childbearing. Alfred Wu, an associate professor at the Lee Kuan Yew School of Public Policy, emphasized that young couples are more concerned about the overall cost of raising a child than the price of contraceptives. He stated, “Young couples deciding whether to have children are not calculating whether they can afford extra dollars for contraception—they are asking whether they can afford to raise a child at all in an environment of economic uncertainty.”

The Sun - US'Not about condoms': Chinese shrug off contraceptive taxThe Straits TimesChina taxes contraceptives by 13% to boost birth rateChina’s Contraceptive Tax and the Hard Limits of Pro-Birth Policies – GKTodayDaily Mail

The introduction of the contraceptive tax has drawn criticism for targeting symptoms rather than the root causes of declining birth rates. Public health experts warn that increased prices could lead to unwanted pregnancies and higher rates of sexually transmitted infections, including HIV. Critics argue that the tax is trivial compared to the substantial financial burden of raising a child in one of the world's most expensive countries for child-rearing.

China’s Contraceptive Tax and the Hard Limits of Pro-Birth Policies – GKToday

As China continues to confront its demographic challenges, the effectiveness of its pro-natalist policies remains uncertain. While the government has pledged to promote positive views on marriage and childbearing, many young people feel that without addressing the economic and social conditions that influence family planning, such measures may fall short. The contraceptive tax serves as a reminder of the complexities involved in reversing decades of demographic trends shaped by urbanization, education, and women's participation in the workforce.

China’s Contraceptive Tax and the Hard Limits of Pro-Birth Policies – GKToday