MNI: China Slashes Tariffs On Range Of Consumer Goods


 date:2017-11-24 15:51:00          


BEIJING (MNI) - China is reducing tariffs on a wide range of consumer goods by an average of almost 10 percentage points, a move analysts say advances the government's supply-side reform agenda while it opens domestic producers to more competition.

The Ministry of Finance announced Friday that China will start to reduce tariffs on 187 categories of consumer goods starting on Dec. 1, with an average tariff rate for these products down to 7.7% from 17.3%.

The consumer goods include food products, healthcare products, medicines, daily necessities, garments, home appliances and entertainment products.

The ministry said the tariff cuts meet the demands of Chinese consumers, and are part of the government's attempt to restructure and upgrade product supplies in China.

The announcement came less than a month after China signaled a possible move on tariff reductions in early November, a few days before U.S. President Donald Trump visited China for the first time after his election.

Trade experts interviewed by MNI, however, said China did not make the move because of pressure from Trump, who has frequently criticized China's large trade surplus with the United States. Instead, they said, the tariff reductions are part of China's supply-side reforms.

China is making efforts to introduce more competition into its domestic market in order to restructure its industries and enhance the quality of its supply of goods, Pei Jiansuo,associate professor at the University of International Business and Economics in Beijing, told MNI.

The government is also under some pressure from Chinese consumers to reduce tariffs. In the face of high tariffs at home, Chinese consumers often resort to using friends and family who travel overseas to purchase luxury products and cosmetics for them -- a phenomenon known as "daigou."

Yu Miaojie, an economics professor at Peking University with a focus on international trade and China's economic development, said in an interview with MNI that the tariff cuts are a signal that China is continuing to further open up its market. He noted that the range of tariff reductions is relatively large and offers a "high-level opening," and reflects China's increasing confidence in its economy and industries.

Yu said the impact of the tariff cuts would be small on overall trade, in the context of its total trade volume of more than $3.31 trillion in the first 10 months of the year. He also said the 187 categories of consumer goods included in this round of tariff cuts comprise only a small part of the nearly 7,000 categories in total.

Pei, on the other hand, said reducing tariffs could hurt some domestic manufacturers and employment, depending on how much domestic demand for foreign consumer goods exists. He noted that some Chinese consumers would still be willing to go abroad to purchase foreign goods, as they may be priced much lower than if they are bought inChina, despite the tariff cuts.

Source:MNI(www.marketnews.com)

 
 
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