China has ended a three-decade-old tax exemption on contraceptive drugs and devices, a move aimed at addressing the country’s rapidly declining birth rate. Starting January 1, condoms, contraceptive pills, and related products are now subject to a 13% value-added tax (VAT), which is the standard rate applied to most consumer goods in China.
The policy change comes as Beijing intensifies efforts to reverse a prolonged demographic downturn. China’s population declined for the third consecutive year in 2024, underscoring growing concerns about labor shortages, economic growth, and long-term social stability in the world’s second-largest economy. Demographers and economists have warned that without significant policy intervention, the population decline is likely to continue in the coming decades.
China’s falling birth rates are rooted in multiple structural factors. The one-child policy, enforced between 1980 and 2015, fundamentally reshaped family planning norms and reduced fertility over generations. Rapid urbanization, rising living costs, and changing social values have further contributed to fewer marriages and delayed childbearing. High housing prices, expensive childcare, rising education costs, job insecurity, and a slowing economy have made starting a family less attractive for many young Chinese couples.
In recent years, Chinese authorities have rolled out a series of “fertility-friendly” policies to encourage marriage and childbirth. These include exempting childcare subsidies from personal income tax, introducing annual childcare allowances, and encouraging universities to promote positive views on love, marriage, family, and fertility through educational programs. At the Central Economic Work Conference held last month, top leaders reiterated their commitment to fostering “positive marriage and childbearing attitudes” as part of a broader strategy to stabilize population growth.
While removing tax exemptions on contraceptives has sparked debate, policymakers view it as one element of a wider demographic strategy. Whether such measures will significantly impact China’s birth rate remains uncertain, as many experts argue that deeper economic and social reforms are needed to make parenthood more affordable and appealing for younger generations.


Senate Stablecoin Bill Sparks Clash Between Banks and Crypto Industry
Oil Prices Surge as U.S.-Iran Conflict Threatens Strait of Hormuz Supply Route
China Banks Halt New Loans to Sanctioned Refineries Amid U.S.-Iran Oil Crackdown
Trump Administration Dismisses Entire National Science Board, Raising Concerns Over Scientific Independence
European Stocks Fall as US-Iran Conflict Rekindles Energy Supply Fears
Wall Street Futures Slip After Record Rally Fueled by Iran Peace Hopes and AMD Surge
Wall Street Futures Edge Higher as Iran Tensions and AI Optimism Shape Markets
US Trade Court Blocks Trump’s 10% Global Tariffs
Medicare to Cover GLP-1 Weight-Loss and Diabetes Drugs Starting July 1
Japan Tech Stocks Surge as AI Optimism Lifts SoftBank, Chipmakers
Trump Expands Cuba Sanctions Targeting Key Sectors and Foreign Entities
Asian Currencies Slip as US Dollar Gains on Rising Iran Tensions and Awaited Jobs Data
US Adds European Union to Section 301 Watchlist Amid Trade Concerns
US to Withdraw 5,000 Troops from Germany Amid Growing Rift with European Allies
US-Iran Ceasefire Under Pressure as Fresh Strait of Hormuz Clashes Shake Oil Markets
U.S.-China Beef Trade Deal Hopes Rise Ahead of Trump-Xi Summit 



