China has begun imposing a 13 per cent sales tax on contraceptives, including condoms, birth control pills and devices from January 1 2026, while exempting childcare services from value added tax. The move is part of a broader tax overhaul announced in late 2025 that removes exemptions in place since 1994, when China was still enforcing its decades-long one-child policy, according to the BBC.
Under the revised tax structure, marriage-related services and elderly care have also been exempted from VAT. Officials say the changes are intended to align taxation with wider efforts to encourage family formation and address the country’s deepening demographic challenges.
Why China abandoned the one-child policy
January 1, 2026, marks 10 years since China formally scrapped the one-child policy. Introduced in 1980, the policy was aimed at controlling population growth, which authorities feared could derail economic development and poverty reduction.
For decades, the policy was enforced through an extensive and often harsh state apparatus, involving propaganda campaigns, intimidation, heavy fines and in some cases forced abortions and sterilisations to prevent what were considered excess births. Over time, however, the government acknowledged that declining birth rates and a shrinking workforce posed a serious threat to long term economic growth. This led to the policy being repealed in 2016, according to CNN.
Why pro-life policies have struggled
Despite a series of incentives aimed at encouraging couples to have more children, China’s population has continued to fall. Reuters reported that the population declined for a third consecutive year in 2024, with demographers warning that the trend is likely to persist. At the same time, the country is ageing rapidly.
According to CNN, people aged over 60 now make up more than 20 per cent of China’s 1.4 billion population. United Nations projections suggest this proportion could rise to nearly half by 2100, putting immense pressure on the economy and social welfare systems.
Why raising children is so challenging
High costs remain one of the biggest deterrents to parenthood. China ranks among the most expensive countries in the world to raise a child, according to a 2024 report by the YuWa Population Research Institute in Beijing, cited by the BBC. Education-related expenses are a major driver of these costs.
Economic uncertainty has further worsened the situation. A prolonged slowdown, partly linked to a property sector crisis that has eroded household savings, has left many families uncertain about their financial future. Beyond money, experts say boosting birth rates also requires tackling issues such as high youth unemployment and the unequal burden of childcare that continues to fall largely on women.
Concerns over the new approach
The decision to tax contraceptives has triggered criticism and ridicule, with some warning it could increase the risk of unwanted pregnancies and the spread of HIV. Critics argue that higher condom prices are unlikely to convince couples who are already hesitant to have children.
While local governments have introduced measures such as tax breaks, housing support, cash incentives and longer maternity leave, reports of women receiving calls from community workers asking about their plans to have children have raised concerns. According to CNN, there are fears that pro-natalist policies could become intrusive or coercive, further complicating efforts to reverse China’s demographic decline.
