China ends longstanding tax exemption on contraceptives in bid to boost birth rate

• China has ended a 30-year tax exemption on contraceptives, imposing a 13% value-added tax on condoms and birth control pills starting Jan. 1 to help address falling birth rates.
• The move follows years of “fertility-friendly” policies, including tax-free childcare subsidies, annual child allowances and campaigns promoting marriage and family life.
• China’s population declined for a third consecutive year in 2024, with experts warning the country could lose about 20% of its population over the next three decades.
• The demographic crisis stems from decades of the One-Child Policy, rapid urbanization and rising economic pressures, including housing, childcare and education costs.
• Officials hope a combination of incentives and new policies, including taxing contraceptives, can reverse the long-term population decline, despite parallels to similar struggles in Western countries.

China has removed a three-decade-old tax exemption on contraceptive drugs and devices as part of new efforts to reverse the country’s declining birth rate.

Chinese authorities have introduced a range of so-called “fertility-friendly” policies in recent years. In 2024, the government exempted childcare subsidies from personal income tax and rolled out an annual childcare subsidy. Other measures included urging colleges and universities to provide “love education” to portray marriage, relationships, fertility and family life in a positive light.

China’s top leadership reiterated those goals last month at the annual Central Economic Work Conference, pledging to promote “positive marriage and childbearing attitudes” as part of broader efforts to stabilize birth rates.

Beijing has also taken additional steps. Beginning Jan. 1, condoms and contraceptive pills are subject to a 13% value-added tax, the standard rate applied to most consumer goods. The exemption had been in place for more than 30 years.

The policy change comes as Beijing intensifies measures to address demographic challenges in the world’s second-largest economy. China’s population declined for a third consecutive year in 2024, and experts have warned that the downward trend is likely to continue in the coming years.

“China is expected to lose about 20% of its population over the next 30 years. There is no doubt this will have consequences for the global economy. Societies react reflexively to such developments. China responds with aggressive subsidies for its export engine to counter these domestic distortions, which primarily manifest economically as deflationary pressures,” Thomas Kolbe wrote in his article for ZeroHedge in December.

One Child Policy and rising costs drive China’s deepening demographic crisis

The country’s demographic decline has deep roots.

According to BrightU.AI‘s Enoch, China implemented the One-Child Policy from 1979 to 2015 to restrict families to having only one child. This policy was enforced through fines, loss of employment and even forced abortions or sterilizations. The policy sought to curb population growth but resulted in significant social issues, including a gender imbalance, an aging population and labor shortages.

This, along with rapid urbanization, reshaped family structures and expectations. Economic pressures have further dampened family formation. High costs for housing, childcare and education, coupled with job uncertainty and a slowing economy, have led many young Chinese adults to delay or forgo marriage and parenthood altogether.

Now, as birth rates sharply decline, Kolbe claimed that Chinese leaders are adopting approaches similar to those used in Western democracies – introducing child benefits even as classrooms and kindergartens increasingly sit empty.

Moreover, Chinese officials hope that taxing contraceptives and expanding family incentives can meaningfully reverse China’s long-term demographic decline.

Watch the video below to learn about Trump’s consideration of a “baby bonus,” similar to measures being explored by China, as a potential way to boost birth rates in the United States.

This video is from the TrendingNews channel on Brighteon.com.

Sources include:

ZeroHedge.com 1

Reuters.com

ZeroHedge.com 2

BrightU.ai

Brighteon.com