On January 1st, 2020, China adjusted import tariffs on some commodities.
Expanding imports, people choose more.
In order to actively expand imports, stimulate import potential and optimize import structure, China will implement a provisional import tax rate lower than the MFN rate for more than 850 commodities from January 1, 2020.
Among the four types of tax rates involved in this tariff adjustment plan, the most-favored-nation tax rate, agreed tax rate and preferential tax rate are implemented step by step according to the multilateral tariff agreements and trade preferential arrangements that have entered into force. The provisional tax rate adjustment is implemented according to the needs of domestic development.
What impact does this tariff adjustment have on residents’ lives and the development of related industries and industries? What role does it play in promoting China’s opening up? The reporter interviewed relevant experts and scholars.
Promote a higher level of opening up.
According to the negotiation results of expanding the product range of information technology agreements under the WTO framework, on July 1, 2020, China implemented the fifth step of reducing the MFN tax rate of some information technology products.
Experts said that in December 2015, 24 WTO members, including China, the United States, Europe, Japan and South Korea, reached an agreement on expanding the product range of the Information Technology Agreement, and gradually canceled the import tariffs on 201 information technology expanded products according to the most-favored-nation treatment principle. These products mainly include information and communication products, semiconductors and their production equipment, audio-visual products, medical devices, instruments and meters, etc. The annual global trade volume is about 1.3 trillion US dollars, and the trade volume of these products in China accounts for about a quarter of the world. From September 2016 to July 2019, China has successively implemented four steps of tax reduction according to the agreement. The fifth step of tax reduction involves 176 products. After the tax reduction, the tax rate of most products has been lower, for example, the tax rate of rangefinders has been reduced from 3% to 1.5%, and the tax rate of color B-ultrasound has been reduced from 2.5% to 1.9%.
Experts said that the smooth implementation of this achievement will help Chinese enterprises using information technology products to reduce costs, improve production efficiency and move towards high-end industries, and will also effectively promote the development of global trade, investment and information technology.
According to the free trade agreements or preferential trade arrangements signed between China and relevant countries or regions, in 2020, China will continue to implement the agreed tax rate on some commodities originating in 23 countries or regions. Among them, the free trade agreements between China and New Zealand, Peru, Costa Rica, Switzerland, Iceland, Singapore, Australia, South Korea, Georgia, Chile and Pakistan and the Asia-Pacific Trade Agreement have been further reduced.
Experts said that on December 1, 2019, the second phase protocol of the China-Pakistan Free Trade Agreement came into effect, and the tariff concessions will be implemented from January 1, 2020. This is not only an important measure to implement the consensus of the leaders of the two countries and further enrich and enrich the all-weather strategic partnership between China and Pakistan, but also a vivid practice to promote the construction of the Belt and Road Initiative and build a community of human destiny.
The preferential tariff rate involved in this tariff adjustment refers to the tax rate applied to unilaterally give special preferential tariff treatment to the least developed countries concerned. In 2020, except for Equatorial Guinea, which graduated from the least developed countries for three years and stopped enjoying preferential treatment, other least developed countries that have established diplomatic relations with China and completed the exchange of letters will continue to enjoy preferential zero-tariff treatment.
Better meet the needs of people’s lives
The provisional import tax adjustment in 2020 will appropriately reduce the tariffs on some consumer goods to better meet people’s living needs.
First, the provisional import tax rate for frozen pork is reduced from the current 12% to 8%, aiming at promoting the domestic pork market to increase supply. At the same time, in order to support the domestic pig industry to resume production, in 2020, we will continue to implement zero tariffs on miscellaneous meals involving 10 tax items.
The second is to implement zero tariffs on some drugs and APIs to further reduce the drug burden of patients with chronic diseases.
In this tentative tax rate adjustment plan, zero tariffs will be imposed on drugs for treating asthma and raw materials for producing new diabetes drugs, such as Engelgin, Liggliptin and Vigliptin. Experts said that at present, COPD has become a chronic disease equivalent to hypertension and diabetes, and the demand for drugs is increasing. Implementing zero tariffs on these drugs and APIs can reduce the burden of patients.
The third is to reduce the import tariffs on some fruits and juices, and further enrich the people’s dining tables.
From 2016 to 2018, China’s provisional import tax rate on fresh avocados was reduced to 7% twice. From 2020, the import tariff rate of frozen avocados will be reduced from 30% to 7%, which is consistent with the tax rate of fresh avocados, enriching the varieties of imported avocados in the domestic market.
From 2020, China will reduce the import tariff of large packaged non-frozen orange juice from 30% to 15%. According to industry insiders, this adjustment not only considers reducing the production cost of beverage enterprises, but also takes into account the development of domestic fruit planting industry.
Boost high-quality economic development
Appropriately reduce import tariffs on advanced technologies, equipment, spare parts and raw materials, and promote high-quality economic development. In 2020, the tariffs on products such as semiconductor testing sorting and braiding machine, ferroniobium, hydraulic torque converter and aluminum valve core for automatic transmission of some motor vehicles, dispersion liquid for photoresist and culture medium will be reduced. Experts pointed out that the implementation of the provisional tax rate for these products is conducive to the development of high-tech industries such as integrated circuits, aerospace, automobiles, communications, electronics and biology, and helps the transformation and upgrading of related industries.
Wu Songquan, chief expert of China Automotive Technology and Research Center, believes that hydraulic torque converter and high-precision aluminum valve core are key core components of automotive automatic transmission, but there is a big quality gap between domestic products and similar foreign products at present, and the whole industry still has to rely heavily on imports. The implementation of the provisional tax rate on the import of these two auto parts can reduce the import cost, help reduce the price of domestic automatic transmissions and improve market competitiveness. "The implementation of the provisional tax rate has also sent a clear signal that the state will adopt various means including tariffs to promote the transformation and upgrading of the automobile industry and high-quality development." Wu Songquan said.
Culture medium is an important raw material for the development of biomedicine, and antibody biopharmaceuticals produced by culture medium have special effects on the treatment of major diseases such as tumors. After the implementation of the universal two-child policy in China, residents’ demand for assisted reproductive media has also increased rapidly. Experts said that because the domestic production technology is still immature, the current culture medium mainly depends on imports. Reducing the import tariff of culture medium from 3% to 2% from 2020 will be beneficial to drug innovation and biotechnology development in China.
Protect the environment, reduce import tariffs on some wood and paper products, and cancel the provisional import tax rate on solid waste and broken materials. From 2020, China will set a provisional import tax rate for more than 150 kinds of wood and paper products, which will be reduced from about 5.3% to about 3.2%, involving fiberboard, plywood, particleboard, wood floor, cork products, corrugated base paper and kraft paper.
Experts pointed out that wood and paper products are renewable resource products, which consume energy and water in the processing process, and are prone to dust and other problems, polluting the environment. Due to the rapid development of express delivery industry, the demand for packaging materials for paper products in China has soared in recent years. Setting a tentative tax rate is conducive to saving domestic timber resources, protecting the environment, introducing foreign products, making the domestic market more competitive, and promoting the transformation and upgrading of domestic forest products and paper industry.
At the same time, in order to protect the safety of ecological environment and people’s health, since January 1, 2020, China has deleted tungsten scrap and niobium scrap from the scope of application of the current provisional import tax rate. After the cancellation, the import tax rate of these two kinds of goods has increased from 1% to 3%. (Reporter Qu Zhehan)