China introduces new tax measures to boost birth rates, Reuters reports
Photo: China (Getty Images)
Chinese authorities have changed the tax regime for contraceptives since the beginning of the year, continuing adjustments to the country’s demographic policy amid persistently declining birth rates and a shrinking population, according to a report by Reuters.
Removal of tax breaks on contraception
Starting January 1, China ended a tax exemption that had kept contraceptives free from taxation for more than 30 years. Condoms and birth control pills are now subject to a 13% value-added tax, the standard rate applied to most consumer goods.
Demographic decline and Beijing's response
The move comes as authorities seek to reverse negative demographic trends. China’s population fell for a third consecutive year in 2024, and experts warn the decline is likely to continue. Low birth rates remain one of the most pressing challenges facing the world’s second-largest economy.
Financial incentives for families
Last year, the government exempted childcare subsidies from personal income tax and introduced annual financial support for families with children. These steps were part of a broader package rolled out in 2024, including calls for schools to promote so-called "love education" to encourage positive attitudes toward marriage, family life, and childbearing.
Leadership stance
In December, at the annual Central Economic Work Conference, China’s top leadership reiterated its commitment to fostering a "positive attitude toward marriage and childbearing" to help stabilize birth rates.
Why birth rates are falling
China’s fertility has been declining for decades due to the legacy of the one-child policy (in place from 1980 to 2015) and rapid urbanization. Additional pressures include the high cost of childcare and education, labor market uncertainty, and slower economic growth, all of which deter young people from starting families.
China has recorded a marked acceleration in the decline of industrial profits, deepening doubts about the sustainability of the country’s economic recovery. Analysts note that domestic demand remains weak and fails to offset even rising export revenues, limiting the overall positive impact of foreign trade.
Separately, in November 2025, China significantly increased its purchases of Russian gold, driving import volumes to record levels in recent years. Estimates indicate that shipments of the precious metal from Russia to the Chinese market exceeded $960 million, the highest figure for the period under review, underscoring strengthened bilateral trade ties in this segment.
