China removed a three-decade-old tax exemption on contraceptive drugs and condoms from January 1 in new steps to boost low birth rates, reports Reuters. Condoms and contraceptive pills now incur value-added tax of 13%, the standard rate for most consumer goods.

The move comes as Beijing struggles to boost birth rates. China’s population fell for a third consecutive year in 2024 and experts have cautioned the downturn will continue. 

China’s birth rates have been falling for decades as a result of the one-child policy China implemented from 1980 to 2015, and rapid urbanisation. 

Beijing has announced it will restore a 30-year-old tax on contraceptive drugs and condoms in a bid to cut sales of contraceptives and thereby boost birthrates. The announcement follows a recent move to waive all hospital fees for child delivery.

China is struggling with a low birth rate, and despite Beijing’s best efforts to reverse the decades-long One Child Policy in 2016, many couples are choosing to not have children. Rising living costs, lack of confidence in the future and a weak employment market are all contributing to a general unwillingness to marry or have kids.

This is important for several reasons. One is that domestic consumption is a problem and the low birth rate directly impacts all products that relate to babies and kids. Babies are also future consumers, and an economy that is healthy has a healthy pipeline of consumers. Robots don’t consume.

China is intensifying its efforts to incentivize childbearing by proposing to make hospital deliveries free of charge, reports Caixin. This is the latest step in a broad campaign to reverse the country’s deepening demographic decline.

The National Healthcare Security Administration, the country’s medical-insurance regulator, set out plans at a meeting last week to eliminate out-of-pocket costs for childbirth within policy limits. Seven provinces, including Jilin, Jiangsu and Shandong, have already rolled out policies to fully cover inpatient delivery expenses.

The initiative comes as Beijing grapples with a shrinking workforce and an ageing society. While the government has scrapped birth limits and introduced various incentives, the high cost of raising a child remains a primary deterrent for many families.

Beijing has announced that all childbirth deliveries in hospitals will become free in 2026. This is the latest move in an ongoing campaign aimed at tackling the declining population.

Since the one child policy was abolished around ten years ago, the Chinese leadership has struggled to get people to have children, but the birthrate has continued to persistently decline. 

One big factor in this is the financial burden that raising a family has on many households. A declining population has a significant knock-on effect on the entire economy. A growing population is a good basis for a strong economy, as human beings consume, while robots don’t.

China approved its first homegrown mRNA vaccine for COVID-19, adding a key tool to combat future outbreaks of the virus that was missing due to Beijing’s reluctance to allow Western-made shots using the gene-based technology, reports The Wall Street Journal.

CSPC Pharmaceutical Group’s messenger-RNA vaccine, known as SYS6006, was given emergency-use clearance by regulators, the company said in a filing to the Hong Kong stock exchange Wednesday. The vaccine was designed to work against the latest variants of COVID-19, and also proved effective against older strains, it said.

China has relied on older technology, primarily so-called inactivated vaccines, to protect its population during the pandemic, as well as exporting billions of shots—many to poorer countries. But as the virus mutated, China’s vaccines proved less effective against the highly transmissible Omicron variants than did the mRNA ones produced by the West.