In 2024, China is facing a severe demographic crisis. Once the world's most populous country, it now sees a dramatic fall in birth rates and a rapidly aging population. The roots of this situation trace back to the 36-year "one-child policy" (1979-2015), during which strict limits were enforced via fines, sterilizations, and forced abortions. This led to a sharp gender imbalance—there are over 33 million more men than women in China.
Although policy was revised in 2016 (allowing two children per family, rising to three in 2021), the trend toward demographic decline has only accelerated. In 2024, only 9.5 million children were born, half the figure of a decade ago. Key reasons include the high cost of living, very expensive housing, a harsh work culture, youth unemployment, and intense financial pressure on young families.
From late 2024, China is withdrawing VAT exemptions for contraceptives, and condoms and pills will again be taxed at the standard 13%. Officially dubbed a "technical adjustment," the price increase is seen as an attempt to influence family planning. Experts, however, note that such measures are negligible compared to the real scale of the problem; reluctance to have children is mainly driven by high child-rearing and housing costs, and economic hardship.
Chinese society is aging rapidly: already, 22% of citizens are over 60, and by 2050, this will reach 40%. China's pension fund could run dry by 2035. The government is raising the retirement age and offering subsidies for children, but the impact is limited. Most young people delay family formation and childbearing due to economic, social, and psychological barriers.
Conclusion: Raising taxes on contraceptives is a symbolic move and cannot address the underlying demographic problems. China may become the first major economy to age before it gets rich. Only structural reforms in the economy, labor market, housing, and youth support can have a lasting impact.
