Tariffs have fallen again. The state council's committee on tariffs and tariffs has recently issued a circular to introduce provisional import tariffs below the most-favoured-nation (mfn) rate for 883 commodities, effective 1 january 2021, to support the construction of a new development pattern based on a large domestic cycle that is mutually reinforcing both domestic and international. Industry has pointed out that this adjustment has helped to reduce china's import costs and to attract a global resource element that not only meets domestic needs but also provides countries with wider market opportunities, better links to domestic and international markets, and helps build new development patterns。
Why
Tariffs have the function of safeguarding national revenues, regulating socio-economic activities and protecting the economic interests of the country in foreign trade and trade. Since its reform and opening up, china has made full use of tariff reductions, exemptions and rebates to promote its economic development. It can be said that the shift in tariffs bears witness to the evolution of foreign trade。
Improving legislation and policies - since 1 january 1980, china has resumed the imposition of separate customs duties on foreign trade imports and exports. In january 1985, the state council considered the adoption of the regulations of the people's republic of china on imports and exports tariffs, and customs began collecting customs duties in accordance with the customs imports and exports tax code of the people's republic of china, as defined by the customs regulations; on 1 july 1987, the customs law of the people's republic of china was promulgated and implemented, based on customs laws and customs regulations, and a series of accompanying regulations were issued。
Active participation in international rule-making — china acceded to the international convention on the harmonized system in 1992; in june 2015, it led the development of the world customs organization framework of standards for cross-border electricians, the first worldwide customs cross-border electrician regulatory and service guidance document。
Optimizing the tax system — in recent years, china has achieved several reductions in import tariffs on consumer goods such as clothing, bags, boots, specialty foods and medicines。
With effect from 1 may 2018, china reduced its import duty on all generic drugs, including anti-cancer drugs, bio-alkali drugs with anti-cancer effects, and actual imports of chinese medicines to zero. With effect from 1 november of the same year, china reduced import tariffs for 1585 tax purposes and its overall tariff level fell from 9. 8 per cent to 7. 5 per cent。
With effect from 1 january 2019, china introduced a provisional import tariff on 706 commodities and a zero-tariff tariff on essential materials that need to be imported for the domestic production of medicines to treat cancer and rare diseases, covering 63 varieties under 31 tariff lines。
With effect from 1 january 2020, china applied a provisional import duty rate lower than the most-favoured-nation (mfn) rate for 859 commodities and continued to apply the agreement rate for some commodities originating in 23 countries or areas。
In 2021, china once again adjusted its import tariffs and sent out a “gift pack” of its policies to promote livelihoods and promote the economy. According to the state council committee on tariffs and tariffs, as of 1 january this year, china has applied a provisional import rate below the mfn rate for 883 commodities。
“the most-favoured-nation rate is the rate applied by china to imports in most countries. The provisional rates are those applied over a certain period of time for some goods imported or exported, which are generally lower than the most-favoured-nation rate and are common forms of autonomous tariff adjustment.” zhang jianping, deputy director of the academic council of the academy of the ministry of commerce and director of the regional economic research centre, explained that “at the end of every year, china adjusts its tariff rates for some imported goods, mainly in order to adapt to economic and social developments. Over the past 70 years, china's tariff development has witnessed a remarkable journey from small to large and weak to strong foreign trade. This adjustment fully reflects the basic idea that countries meet their domestic mega-market demand through imports. With china's deep participation in and contribution to the process of economic globalization and the emergence of a new and more comprehensive and open economy, the door to china's openness to the outside world has grown wider.”
Life, quality, promotion
In particular, the new tariff adjustment reflects a three-pronged approach:
Reducing the financial burden on patients and improving the quality of life of the people. The tariff adjustment programme explicitly imposed a zero tariff on the second batch of anti-cancer and rare medical products, food for special children, reduced import tariffs on medical equipment such as artificial heart valves and hearing aids, and reduced import tariffs on infant milk powders such as milk protein powder and iron protein by up to 50 per cent。
“this reflects the state's continuing commitment to a people-centred and people-centred concept that meets the aspirations of the people for a better life, as well as the domestic market's demand for infant milk.” zhang jianping said that “the sustained release of tariff policy dividends highlights the `good livelihood' orientation. Both consumers and patients can achieve tangible benefits by effectively reducing spending.”
Better meeting domestic production needs and promoting high-quality economic development. In order to meet domestic production needs, the adjustment programme has clearly reduced the import duty on some of the equipment, spare parts and raw materials required for new capital or high-technology industries such as fuel cell cycle pumps, aluminium carbide silica plates and arsenic, from 5 to 8 per cent to 2 to 4 per cent. At the same time, the new tariff adjustment also reduced import tariffs on some energy-efficient and environmentally friendly products in terms of high-quality economic development. For example, as an important component of energy-saving emission reductions in automobiles, the import tariffs for waste gas recycling valves were reduced from 7 per cent to 5 per cent。
In addition, the introduction of lower provisional rates for the import of aviation equipment, such as fuel pumps for aircraft engines, to facilitate international cooperation in the area of aviation; the reduction of provisional rates for the import of goods such as timber and paper products, non-alloy nickel and exercise products to encourage the import of resource-based products, as well as a modest reduction in the cotton ski duty; and the introduction of a sixth step in the most-favoured-nation tax on 176 information technology products, effective 1 july 2021。
“the reduction of import tariffs on these goods can effectively reduce the cost of imports of such goods as high-tech equipment and spare parts for domestic industrial upgrading, scarce domestic resources and some high-quality raw materials, and help to accelerate the process of modernization, digitization and intellectualization of domestic industries and promote domestic industrial upgrading.” zhao ping, vice-president of the china institute of trade promotion, said。
Emphasis was placed on economic development and environmental protection. The adjustment programme states that, in order to implement the solid waste pollution environmental control act, the provisional tax rate on imports of solid waste, such as scrap metal, was abolished as of 1 january 2021 and the most-favoured-nation tax was reinstated. “with the development of the domestic economy, building ecological civilization, giving priority to environmental protection and safeguarding public health has become a social consensus. China has banned the import of various types of electronic waste in previous years, also for this reason.” according to zhang, “this reflects the emphasis placed on the development concept of ecological civilization in the pursuit of high-quality development and `two cycles', raising standards of environmental protection and reducing energy consumption”
“in general, this tariff adjustment will have a positive impact on domestic consumption, and the sense of feeling and well-being of the population will be raised effectively, both to meet domestic demand and to raise the level of technological development of china's industries and to promote an ambitious and smooth domestic economic cycle.” zhang jianping said that “at the same time, it would facilitate the establishment of a global network of high-standard free-trade zones, better connecting domestic and international markets, promoting the joint development of china's economy with the world economy and promoting cooperation for win and win”
Expanding the “circle of friends”, sharing development red lee
In addition to focusing on domestic demand and adjusting import tariffs to keep the signals of accelerated expansion of openness, china’s determination to expand the “friend circle” and promote the sharing of win-wins is also reflected。
In order to promote high-quality development in the “one-way route”, high-quality imports and high-level exits, china will apply an agreed tax rate for some imports originating in the countries or areas concerned in 2021, in accordance with free trade agreements or preferential trade arrangements that china has signed with the countries or regions concerned and enter into force. Among them, the china-mauritius fta entered into force on 1 january 2021 and introduced tax reductions。
The officer-in-charge of the world trade division of the ministry of commerce said that the agreement had generally been comprehensive, high-level and mutually beneficial, contributing to the building of a closer central african destiny community and filling the gap in the african region in china's existing free-trade zone network. With the entry into force of the agreement, china and the maoists eventually achieved zero-tariff tariff rates of 96. 3 per cent and 94. 2 per cent, respectively, in the area of trade in goods. In the area of trade in services, the commitment of both parties to open up more than 100 subsectors. In the area of investment, china had for the first time upgraded its investment protection agreement with african countries. The deputy director of the west asia african institute of the chinese institute of social sciences, yang boon, stated that the agreement not only provided stronger institutional safeguards for deepening economic and trade relations between the two countries, but also gave a new dimension to the comprehensive strategic partnership for central africa, raising economic and trade cooperation between the two countries to a new level。
In addition, further reductions were made by china, new zealand, peru, costa rica, switzerland, iceland, pakistan, chile, australia, the republic of korea, georgia's fta and the asia-pacific trade agreement. Some imports originating in mongolia are subject to apta rates effective 1 january 2021. In 2021, preferential rates continued to be applied to 43 least developed countries that had entered into and completed exchange of letters with china, and the range of ex gratia rates applied to commodities and rates remained unchanged。
Liu, researcher at the economic research department of the china international economic exchange centre, indicated that bangladesh, china, india, laos, the republic of korea, mongolia and sri lanka, members of the asia-pacific trade agreement, are major emerging markets that can be tapped along the current “one-way path”. In the context of the global epidemic and the rise in trade protectionism, the continuation of the foreign policy tone of free trade will not only help to preserve an open world economy and jointly respond to external shocks, but will also further strengthen value chain cooperation and promote higher levels of asia-pacific production networks。
“china proposes high-quality promotion of the construction of a global free-trade zone network for the `across the `across the `across the `across the `across the `across the `across the `across the `round' `across the `across the `across the `round' `across the `across the `round' `across the `across the `round' `across the `round' `across' `across the `round' `across the `round' `across the `across the `away' `across the `away' `across the `across the `away' `across the `away' `across the `across the `across the `across the `a' zone', `across the ` `across the `across the `across the ` ` ` ` ` ` zhang jianping stated that “at the same time, it would also help china and its `cross-the-road' partners to develop advantages and complementarities, cooperative interaction and a new pattern of `induction' and `exit' coordinated development with international economic and trade cooperation”
This adjustment is the first step towards opening up in 2021, and will be followed by a series of stronger and broader policy dividends: the 2020 edition of the catalogue of industries encouraging foreign investment will be implemented from 27 january 2021; china will continue to apply the agreed rates to the countries or regions concerned in 2021. “it is foreseeable that this year china will further expand its openness, especially to modern services such as finance and high-end manufacturing, continuously optimizing the domestic business environment and building a high level of openness to new heights.” liu said to dong。
