Since January 1st, China has imposed a provisional import tax rate lower than the MFN rate on 1,020 commodities, namely, the tariff has been reduced continuously, and the open dividend has been releas

Entering 2023, tariffs have ushered in new adjustments-

From January 1st, a provisional import tariff rate lower than the MFN tariff rate will be applied to 1020 commodities; From January 2nd, the tariff rate of RCEP will be applied to some commodities originating in Indonesia. From July 1st, the eighth step will be implemented to reduce the MFN tariff rate of 62 information technology products …

In this tariff adjustment schedule, "down" has become the key word. Experts pointed out that in recent years, China has successively lowered import tariffs on related commodities, boosting global good goods to enter the China market, which not only meets the domestic consumption upgrading and enterprise production needs, but also provides countries with broader market opportunities and shares the China opening bonus.

China’s overall tariff level will drop to 7.3%.

■ Since January 1, 2023, China has imposed a provisional import tariff rate lower than the MFN tariff rate on 1,020 commodities. This number has increased by 66 items compared with the previous year, maintaining growth for four consecutive years.

■ On January 2nd, RCEP came into effect for Indonesia. So far, the world’s largest free trade agreement has come into effect for 14 of its 15 signatory members. Since January 2nd, China has implemented the agreed tariff rate applicable to RCEP ASEAN member countries in 2023 for some imported goods originating in Indonesia.

■ In 2023, China will reduce the import tariffs on homogenized mixed food, frozen blue cod, cashew nuts and other small household appliances such as coffee machines, juicers and hair dryers. Among them, the tax rate of homogenized mixed food, frozen blue cod and other commodities decreased by not less than 50%.

■ From July 1, 2023, China will also implement the eighth step of reducing the MFN tariff rate for 62 information technology products. After adjustment, the total tariff level of China will be reduced from 7.4% to 7.3%.

Further tax reduction in accordance with the FTA and RCEP

At the beginning of the new year, RCEP has made new progress: it came into effect for Indonesia on January 2. So far, the world’s largest free trade agreement has come into effect for 14 of its 15 signatory members.

China is Indonesia’s largest trading partner and the largest export market. After the entry into force of RCEP, the new measures of commodity tariff reduction and exemption introduced by China are a major attraction. The State Council Customs Tariff Commission recently released the tariff adjustment plan for 2023. According to the relevant provisions of RCEP and the entry into force of the agreement for Indonesia, the agreed tariff rate applicable to RCEP ASEAN member countries in 2023 will be implemented for some imported goods originating in Indonesia from January 2. Specifically, on the basis of the China-ASEAN Free Trade Agreement, China will reduce taxes on Indonesian-made pineapple juice and canned food, coconut juice, pepper, diesel oil, paper products, some chemicals and auto parts, among which 67.9% products originating from Indonesia will be subject to immediate zero tariffs from January 2.

"The higher level of openness advocated and led by China is urgently needed by developing economies including Indonesia." Nina Dai, Consul General of Indonesia in Shanghai, said that the China International Import Expo(CIIE) held in China enhanced the recognition and reputation of Indonesian brands in China. In 2021, the bilateral trade volume between the two countries increased by about 56%, of which Indonesian exports increased by nearly 70%. The entry into force of RCEP for Indonesia will continue to promote the deepening of economic, trade and investment relations between Indonesia and China, and further strengthen the existing cooperation.

At present, RCEP has entered the second year of effective implementation. Over the past year or so, China has implemented RCEP with high quality, fully implemented market opening commitments and agreement obligations, continuously promoted tariff reduction and exemption, and promoted trade and investment liberalization and facilitation, which has injected new impetus into the economic and trade development in the Asia-Pacific region and the world.

While reducing or exempting tariffs for newly effective members this year, the State Council Customs Tariff Commission clearly stated that it will further reduce tariffs in accordance with China’s free trade agreements with New Zealand, South Korea, Australia and Cambodia and RCEP.

"With the in-depth implementation of RCEP, New Zealand enterprises are facing more favorable tariffs and more convenient trade measures. The improvement of the business environment has enabled the company’s sales in China to grow rapidly, and it has also enabled China consumers to obtain quality products quickly." Roy Vandenke, general manager of R&D of New Zealand company Newland, said that China’s huge market provides opportunities for international companies like Newland and will also promote the recovery of the world economy. It is foreseeable that RCEP’s inclusive development dividend will make the development of the Asia-Pacific region more prosperous.

Gu Qingyang, an associate professor at the Lee Kuan Yew School of Public Policy at the National University of Singapore, believes that tariff reduction has greatly reduced the trade costs among member countries, made trade activities more active and effectively promoted economic growth, which is a tangible benefit brought by RCEP through trade channels. "China plays an important role in RCEP and is also the main export destination of other RCEP member countries. The stronger economic growth of China in the future will provide RCEP with a broader development space. "

Reduce tariffs on many medical products and consumer goods.

The new round of tariff adjustment involves not only the agreed tariff rate, but also many new changes in MFN tariff rate and provisional tariff rate. According to insiders, the most-favored-nation tax rate is the tax rate applicable to imported goods from most countries in China. Provisional tariff rate refers to the tariff rate for some imported and exported goods within a certain period. The provisional tariff rate is generally lower than the MFN tariff rate, which is a common way to adjust tariffs independently.

According to the tariff adjustment plan for 2023, from January 1st, China implemented a provisional import tariff rate lower than the MFN tariff rate for 1,020 commodities. This number has increased by 66 items compared with the previous year, maintaining growth for four consecutive years.

Sorting out the adjusted catalogue, the reporter found that there are many medical products, such as zero tariffs on some raw materials for anticancer drugs, anti-novel coronavirus drugs and drugs for relieving cancer pain, and reducing import tariffs on medical supplies such as dentures, raw materials for vascular stents and contrast agents.

Zhang Jianping, deputy director of the Academic Committee of the Research Institute of the Ministry of Commerce, analyzed that in the tariff adjustment in recent years, medicine has always been the key area of tax reduction, including zero tariffs on the first and second batches of anticancer drugs and raw materials for rare diseases, and reducing import tariffs on medical products such as artificial heart valves, hearing AIDS, intracranial embolic stents and artificial joints. These measures are helpful to further protect people’s health and reduce the economic burden of patients.

Consumer goods for daily use is another focus of this tariff adjustment. According to the published provisional tax rate table for imported goods, in 2023, the import tariffs on homogenized mixed food, frozen blue cod, cashew nuts and other small household appliances such as coffee machines, juicers and hair dryers will be reduced. Among them, the tax rate of homogenized mixed food, frozen blue cod and other commodities decreased by not less than 50%.

Zhang Jianping believes that at present, China’s consumer demand continues to grow, and the consumption structure is accelerating to upgrade, and the demand for foreign consumer goods with distinctive advantages is heating up. This tax reduction is conducive to conforming to the trend of consumption upgrading and meeting the new consumption demand of residents with high-quality supply; At the same time, it will help imported products compete with domestic products, guide the transformation and upgrading of the supply system, keep up with changes in consumer demand, and achieve a dynamic balance between supply and demand at a higher level.

In addition to medical products and consumer goods, this adjustment also highlights two aspects: first, zero tariffs will be imposed on potash fertilizer and unwrought cobalt, and import tariffs on some commodities such as wood and paper products and boric acid will be reduced; The second is to reduce import tariffs on lithium niobate, electronic ink screens, iridium oxide for fuel cells, roller bearings for wind turbines and other commodities. Experts said that reducing import tariffs on these goods will not only help strengthen the supply capacity of resources, but also promote the innovation and development of advanced manufacturing industries and accelerate industrial transformation and upgrading.

China’s overall tariff level will drop to 7.3%.

Frequent measures to reduce taxes have pushed the overall tariff level in China down continuously. According to the announcement issued by the State Council Customs Tariff Commission, starting from July 1, 2023, China will also implement the eighth step of MFN tariff reduction for 62 information technology products. After adjustment, the total tariff level of China will be reduced from 7.4% to 7.3%.

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 abolished the import tariffs on 201 information technology expanded products according to the most-favoured-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 exceeds 1 trillion US dollars. In 2016, China implemented tax reduction for the products expanded by the Information Technology Agreement for the first time, and has implemented seven-step tax reduction so far.

According to the analysis of insiders, the gradual tax reduction according to the agreement will help reduce the import cost of related components and equipment, better meet the production needs of enterprises, promote the domestic related industries and economies to move towards high-quality development, and will also effectively promote global trade and high-tech development.

The general tariff level is one of the important indicators of a country’s openness in the field of goods trade. The data show that since China joined the WTO for more than 20 years, it has fully fulfilled its WTO commitments and continuously opened its market. The total tariff level has dropped from 15.3% to 7.4% in 2022, which is lower than the WTO commitment of 9.8%.

"Since 2018, China has introduced a series of measures such as implementing zero tariffs on imported anticancer drugs and encouraging the import of innovative drugs. In the following years, a number of innovative drugs of Bayer prescription drugs were approved for listing in China." Steve, chief financial officer of Bayer China, said, "We recognize and attach great importance to China’s opening to the outside world, and we have seen a very favorable business environment in China, which makes us more confident in the future."

Chiwharton, a Swiss flavor and fragrance company, is also one of the beneficiaries of China’s tariff reduction. "The reduction of tariffs has brought significant benefits to enterprises and enhanced our confidence in development." Wu Chongqing, the operation director of Chihuaton China, said that in 2022, China reduced the import tax rate of peppermint oil and orange oil, and the import cost of the company’s two main production raw materials decreased, saving tens of millions of yuan in taxes every year. "This not only eased the cost pressure caused by the rising price of raw materials, but also enabled the company to bring more cost-effective products to downstream customers and consumers, making our China factory more advantageous."

Zhang Jianping said that in recent years, China has taken the initiative to reduce the overall tariff level and introduced a series of new measures to reduce tariffs independently, which has made the world see that China is opening wider and wider, and also made China’s development better benefit the world and promoted all countries to share the big market opportunities in China. (Reporter Qiu Haifeng)