Chinese people will pay a 13% sales tax on contraceptives from 1 January, while childcare services will be exempt, as the world’s second-largest economy tries to boost birth rates.

An overhaul of the tax system announced late last year removes many exemptions that were in place since 1994, when China was still enforcing its decades-long one-child rule.

It also exempts marriage-related services and elderly care from value added tax (VAT) – part of a broader effort that includes extending parental leave and issuing cash handouts.

Faced with an ageing population and sluggish economy, Beijing has been trying hard to encourage more young Chinese people to marry, and couples to have children.

Official figures show that China’s population has shrunk three years in a row, with just 9.54 million babies born in 2024. That is around half of the number of births recorded a decade ago, when China started to ease its rules on how many children people could have.

Still, the tax on contraceptives, including condoms, birth control pills and devices, has sparked concern about unwanted pregnancies and HIV rates, as well as ridicule. Some people point out that it would take a lot more than pricey condoms to persuade them to have children.

As one retailer urged shoppers to stock up ahead of the price hike, a social media user joked: “I’ll buy a lifetime’s worth of condoms now.”

People can tell the difference between the price of a condom and that of raising a child, wrote another.

China is one of the most expensive countries in which to raise a child, according to a 2024 report by the YuWa Population Research Institute in Beijing. Costs are pushed up by school fees in a highly competitive academic environment, and the challenge women have juggling work and parenting, the study said.

The economic slowdown, partly brought on by a property crisis that has hit savings, has left families, and especially young people, feeling uncertain or less confident about their future.

“I have one child, and I don’t want any more,” says 36-year-old Daniel Luo, who lives in the eastern province of Henan.

“It’s like when subway fares increase. When they go up by a yuan or two, people who take the subway don’t change their habits. You still have to take the subway, right?”

He says he is not concerned by the price hike. “A box of condoms might cost an extra five yuan, maybe 10, at most 20. Over a year, that’s just a few hundred yuan, completely affordable.”