China's Controversial Gamble: Taxing Contraceptives to Reverse Plummeting Birth Rates

Beijing, China – In a bold, yet controversial, bid to revitalize its rapidly dwindling population, China is set to implement a new tax on contraceptives starting January 1st. This move, which levies a 13% value-added tax (VAT) on items like condoms and birth control pills, comes as part of a broader government strategy to boost birth rates, reversing policies from the nation's infamous one-child era.

Simultaneously, the Chinese government will exempt childcare services, marriage-related services, and elderly care from the same VAT, signaling a significant pivot in its demographic policy. The overhaul, initially announced late last year, rescinds tax exemptions on contraceptives that had been in place since 1994 – a time when China was still rigorously enforcing its decades-long one-child policy.

A Nation in Demographic Crisis: The Numbers Don't Lie

China's demographic challenges have reached a critical point. Official figures reveal the nation's population has shrunk for three consecutive years, with a mere 9.54 million babies born in 2024. This stark figure represents roughly half the number of births recorded just a decade ago, when Beijing first began to ease its strict family size limitations.

The urgency of the situation is underscored by recent statistics: births plummeted from approximately 14.7 million in 2019 to around 9.5 million in 2024. In a historic shift, India officially surpassed China as the world's most populous country in 2023, highlighting the scale of China's demographic decline. Facing an aging population and a sluggish economy, the government has been increasingly pressuring young people to marry and have more children.

Archive footage from the one-child policy era, which once showcased extensive birth control education, now stands in stark contrast to Beijing's current predicament. The government is actively rolling out new tax and social policies, hoping to encourage larger families and inject vitality into its demographic future.

Public Backlash and Expert Skepticism

The new tax on contraceptives has been met with a mix of ridicule and profound concern across China. On social media platforms, some users have light-heartedly joked about stockpiling condoms before prices rise, while others critically point out that the marginal increase in contraception costs pales in comparison to the monumental expense of raising a child in modern China.

Daniel Luo, a 36-year-old resident of Henan province, articulated a common sentiment to the BBC, stating, "I have one child, and I don’t want any more." He dismissed the potential impact of the price hike, likening it to minor increases in subway fares that do not alter daily routines or significant life decisions.

Potential Unintended Consequences

More gravely, critics and health experts warn of serious unintended consequences. Rosy Zhao from Xi’an voiced concerns that making contraception more expensive could push students or individuals under financial strain to take dangerous risks, potentially leading to more unplanned pregnancies. "That is the policy’s most dangerous potential outcome," she cautioned.

Health professionals echoed these fears, telling The Associated Press that reduced access to affordable contraception could inadvertently contribute to an increase in unintended pregnancies and sexually transmitted infections (STIs). China's National Disease Control and Prevention Administration reported over 670,000 cases of syphilis and more than 100,000 cases of gonorrhea in 2024, data that only amplifies these concerns.

Furthermore, China has historically reported some of the highest abortion numbers globally, with the National Health Commission recording between 9 million and 10 million abortions annually from 2014 to 2021, before the data stopped being published in 2022. This history raises questions about the potential for such numbers to rise again if contraception becomes less accessible.

Will Taxing Contraceptives Really Work?

Demographers and policy analysts remain largely skeptical about the efficacy of taxing contraceptives as a means to meaningfully elevate birth rates. Yi Fuxian, a senior scientist at the University of Wisconsin–Madison, characterized the notion that higher condom prices would sway fertility decisions as "overthinking the policy."

Henrietta Levin of the Center for Strategic and International Studies (CSIS) described Beijing's move as largely symbolic, reflecting the government's desperate attempt to lift what she termed "strikingly low fertility numbers." However, she also highlighted a critical challenge: many of China's proposed incentives and subsidies rely on provincial governments, which are often heavily indebted. This raises significant doubts about their capacity to adequately fund and sustain these birth-boosting measures.

While value-added tax revenue accounted for approximately 40% of China’s tax collection last year, totaling close to $1 trillion, the immediate financial gain from taxing contraceptives is likely negligible compared to the profound demographic shift Beijing hopes to achieve. The core question remains: can a tax hike on birth control truly reverse a deeply entrenched societal trend towards smaller families, or will it merely add another layer of complexity to China's formidable population puzzle?