Gov't cuts tariffs on consumer goods

2015-05-26 09:27 Editor: Li Yan

Move set to benefit customers, e-commerce firms

The Ministry of Finance (MOF) announced on Monday that it would reduce import tariffs on certain consumer goods from next month, as part of its efforts to boost domestic consumption and stabilize economic growth.

Starting from June 1, the import tariff rates on some consumer goods - including skincare products, suits, sneakers and diapers - will be reduced by more than 50 percent on average, the ministry said in a statement on its website.

For instance, the import tariff on skincare products will be cut from 5 percent to 2 percent, and the rate for paper diapers will fall from 7.5 percent to 2 percent, according to the statement.

The move came following a State Council meeting chaired by Premier Li Keqiang on April 28, which decided to lower import tariffs on some popular daily necessities, as well as improving consumption tax policies for clothes and cosmetics so that domestic consumers can have access to a broader range of goods.

The tariff cut comes at a time when China is facing weak domestic consumption demand, as well as lingering downward pressure on economic growth.

China's retail sales rose 10.4 percent year-on-year to 9.31 trillion yuan ($1.5 trillion) in the first four months of 2015, according to statistics released by the National Bureau of Statistics. But consumption still accounts for a relatively small share of GDP in China, due to factors such as high housing prices, the International Business Times reported on April 29.

Luo Yuding, acting dean of the College of Business at the Shanghai University of Finance and Economics, told the Global Times Monday that the tariff cut might lead to changes in consumer behavior, such as people being more willing to buy overseas products in China, instead of only buying them when on trips abroad.

Pan Xiaoer, a Zhejiang native who went to South Korea to buy skincare products during this year's Spring Festival holidays, said the rate cut has changed her mind about making purchases abroad.

"After the tariff cut, the prices of South Korean makeup products in China will only be slightly higher than in South Korea, so there is no need to go abroad to buy those products," she told the Global Times on Monday.

Zhang Yugui, dean of the School of Economics and Finance at the Shanghai International Studies University, told the Global Times Monday that the tariff cut could boost China's imports, as well as offering more convenience for Chinese buyers.

China's imports slumped 17 percent in the first four months of 2015 from a year earlier, according to the General Administration of Customs.

Luo said the tariff cut could cause more overseas consumer goods to be imported into the domestic market, and this in turn will prompt Chinese consumer goods manufacturers to make improvements in terms of their products and services.

"Without high levels of tariff protection, Chinese companies will be forced to launch more technical innovations in order to compete with global brands," he said.

The cut in import tariffs will also have a positive impact for domestic cross-border e-commerce websites, experts said.

A member of the PR staff at, an online retailer specializing in imported skincare and cosmetics, told the Global Times on condition of anonymity that the policy will allow cross-border e-commerce websites to "adjust their businesses in areas such as product prices," adding that this will also bring benefits for consumers., an e-commerce website that specializes in overseas maternal and child products, said that the tariff cut is part of an inevitable trend.

"The policy can help consumers get access to quality products at lower prices," Du Juan, a PR manager at the website, told the Global Times on Monday.

According to Luo, the biggest source of competition for cross-border e-commerce websites are daigou, or overseas personal shoppers who buy and send luxury goods to customers in China. As most of them do not pay any import tariffs for the products, their products have a price advantage over those sold by cross-border e-commerce websites.

"However, that price gap will be greatly lessened after the cut in import tariffs, and cross-border e-commerce websites should see great improvements in their business," he noted.

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