China Roundup: US-China clash on Venezuela, tax on contraceptives, tensions with Japan

China’s new tax on contraceptives signals a shift in demographic policy

In a notable policy change effective 1 January 2026, China removed a three-decade VAT exemption on contraceptive drugs and devices, including condoms and birth control pills, imposing a standard 13% tax in a bid to address its persistent population decline. The move, part of broader measures to boost birth rates, follows years of falling fertility and reinforces Beijing’s prioritisation of family support policies alongside earlier childcare subsidies and pro-marriage initiatives. Officials hope that framing childbearing as socially and economically supported will stabilise demographics in the world’s most populous economy.

China accuses the US of ‘blatant interference’ after Trump claims Venezuela oil

China’s Foreign Ministry criticised the United States on Wednesday, accusing Washington of “blatant interference in Venezuela’s internal affairs” after President Donald Trump announced that up to 50 million barrels of Venezuelan oil would be transferred to the United States for sale, a move Beijing says violates Venezuela’s sovereign rights over its natural resources. China insists Caracas has “full permanent sovereignty” over its oil and called the US actions a breach of international norms, amid broader tensions over control of Venezuelan energy exports. The dispute comes as the US has also seized Venezuela-linked tankers and eased sanctions to redirect crude flows, triggering diplomatic pushback from Beijing and other global partners.

China bans some exports to Japan after PM’s Taiwan remarks

China has imposed immediate restrictions on exports of certain rare earths and other dual-use items to Japan, escalating tensions after the Japanese prime minister Sanae Takaichi warned that a Chinese invasion of Taiwan would threaten Japan’s survival. Beijing said the curbs cover goods with both civilian and military uses, including materials critical to electronics, aerospace and defence, though it did not specify individual products. The move could have significant consequences for Japan, which sourced around 63% of its rare earth imports from China in 2024.

Cambodia extradites alleged scam kingpin Chen Zhi to China

Cambodia has arrested and extradited to China tycoon Chen Zhi, accused of leading a major online scam network and wanted by US authorities on related charges. The Cambodian government said Chen, whose citizenship was revoked last month, was handed over at China’s request after a months-long investigation. US and UK officials have accused him of running a transnational fraud operation that scammed victims worldwide and exploited trafficked workers, part of a regional surge in online scam centres across Southeast Asia.

China sanctions two more Taiwanese cabinet ministers

Beijing has sanctioned Taiwan’s Interior Minister Liu Shyh-fang and Education Minister Cheng Ying-yao, adding them to its list of what it calls “stubborn Taiwan independence figures” for actions it says promote separatism. The measures bar the two ministers and their families from entering mainland China, Hong Kong and Macau, and ban companies linked to them from operating in the mainland.