China’s ruling Communist Party is rolling out yet another drastic population-control reversal, this time by removing a decades-long tax exemption on contraceptives in an effort to push the country’s collapsing birth rate upward.
Beginning January 1, condoms and contraceptive pills are now subject to a 13% value-added tax, the same rate applied to most consumer goods.
It comes after Beijing eliminated the three-decade exemption in place since the 1990s.
The move follows newly released 2024 data showing China’s birth rate has fallen for the third straight year, deepening fears of a long-term demographic crisis that analysts warn is likely to accelerate.
Last year, CCP leaders rolled out an annual childcare subsidy and exempted those payments from personal income tax as part of a suite of so-called “fertility-friendly” measures.
Those included pressuring universities to provide “love education” framing marriage, family, fertility, and childbirth in a positive light, Reuters reported.
In December, China’s leadership vowed at its Central Economic Work Conference to promote “positive marriage and childbearing attitudes.”
The crisis is the self-inflicted result of decades of central-planning.
China’s birth rate has been falling for years due to the CCP’s notorious one-child policy imposed from 1980 to 2015, compounded by rapid urbanization and economic strain.
Today, young Chinese couples are reluctant to marry or start families amid soaring childcare and education costs, shrinking job prospects, and a weakening economy.
China is expected to lose about 20 percent of its population over the next 30 years.
Kolbe warned that such a dramatic contraction will have global consequences, noting that Beijing is already responding “with aggressive subsidies for its export engine” to counter demographic-driven deflationary pressures.
China’s tax policy shift comes as fertility rates around the world continue to collapse.
Global data show that fertility rates, the number of children a woman has in her lifetime, are steadily falling across industrialized societies, while only a handful of high-fertility nations remain, primarily in Africa.
Somalia, Chad, Niger, and the Democratic Republic of Congo are among the few countries where fertility remains high.
According to the U.S. Census Bureau, only about 4 percent of the world’s population now lives in a country where women average more than five children, and even those rates are declining.
India, now the world’s most populous nation, has seen its fertility rate fall to 1.9 children per woman, down from five to six in 1960, according to the UN Population Fund.
In 1990, China’s fertility rate stood at 2.51 despite its one-child policy.
By 2023, it had plunged to below one birth per woman, according to the United Nations population division.
The United States remains below replacement level as well. Fertility fell under replacement in 1972 and dropped to 1.62 in 2023, a historic low.
Low birth rates will end civilization https://t.co/KPxBor9lAJ
— Elon Musk (@elonmusk) April 22, 2025
Asian and European nations now post the world’s lowest fertility levels, including South Korea (0.72), Singapore (0.97), Ukraine (0.977), and China (0.999), all below one child per woman.
China’s contraceptive tax reversal underscores how far the regime is willing to go to repair damage caused by decades of authoritarian population engineering and how difficult reversing demographic decline has now become.
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