China’s Updated Import-Export Tariff Rates for 2023

April 2, 2023
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2023 in China opened with some great news for the international business community, with the lifting of all Covid-19 related policies in the first ten days of January. Now it’s time to share some good news with international exporters and global companies engaged in importation-exportation processes with China. Below we review the latest import and export tariff adjustments and list the key areas subject to newly reduced tariff rates. Can your company take advantage of these changes? Might it be good timing for your business to enter the Chinese market? Keep reading. Learn more about logistics fulfillment & distributing services in China

Reduced national tariff rate

While the adjustments to be described as follows are more industry-specific and country-specific, this one is relevant to all companies doing business in China and trading with China from overseas. According to the 2023 Tariff Adjustment Plan, starting from January 1st, 2023, China’s general tariff rate has been reduced from 7.4% to 7.3%.

Provisional tariff rates on 1,020 imported commodities

Every year China reassesses the areas where reduced tariff rates are most needed to promote its current agenda and priorities. Against the challenges created by the pandemic in the business, industry, and quality of life spheres, it shouldn’t come as a surprise that the government addresses these very areas with the new tariff policy. Starting from January 1st, 1,020 items have enjoyed a provisional tariff rate, which is lower than the MFN (most-favored-nation) tariff rates, and some are even eligible for a zero tariff. This list of commodities has grown by 7% from 2022’s list, which contained only 954 items. The relevant commodities belong to four primary industries, so companies operating within these industries benefit from lower tax bands and subsequently more ability to price competitively:

  • Healthcare & medical supply: Raw materials for anti-cancer and Covid-19 drugs are subject to a zero-tariff rate, and additional medical supplies enjoy the reduced tariff rate, aiming to relieve the economic burden of patients and workers who have suffered from financial losses in the past three years.
  • Industrial supply chain: Raw materials for industrial use (such as potash fertilizers and unwrought cobalt) are now subject to zero-tariff; others can enjoy reduced import tariff rates (such as wood, paper, boric acid, etc.), aiming to stabilize and improve the resilience of industrial supply chain capacities.
  • Advanced manufacturing – Companies that manufacture in China and leverage their advanced manufacturing capabilities enjoy unmatched benefits in regards to maximizing their manufacturing and sale potentials. The lower import tariff rates on advanced manufacturing products that are now in place upgrade the competitive advantage of such companies.
  • Foods & household appliances – To better cater to Chinese consumers and support their consumption power, several food products (such as frozen food, baby food, cashew nuts, etc.) and small household appliances (such as hair dryers, juicers, and coffee machines) are now subject to lower import tariff rates.

Read more on supply chain management in China

Reduced MFN tariff rates on 62 IT products

It seems that IT remains of high importance in the eyes of the Chinese government, as this July additional 62 IT products will enjoy a further cut in the MFN tariff rates. This is the eighth time China has applied such an act, with the last one taking place in July 2022.

Reduced conventional tariff rates on commodities from 29 countries

Starting from January 2nd, exporters from the 29 countries that have bilateral trade agreements with China (e.g., Australia, New Zealand, Switzerland, Singapore, Vietnam, Japan, and more) enjoy a further reduction of the conventional tariff rates on selected imported taxable items. With this move, China signals that it is interested in developing its business and commercial ties with these countries, opening the market and the door for continued international trade. Exporting your products to China? You better check their up-to-date HS codes  

Increased tariff rates in less competitive industries

In order to balance the new reduced tariff rates, at the same time, China imposes higher import and export duty rates on other products such as tires, aluminum, and several agricultural machines, which are currently deemed as a lower priority for China’s trade criteria. Moreover, the government expanded the list of commodities subject to import and export tariffs with additional 18 items, totaled in 8,948 products altogether. These 18 items include mainly agricultural products such as white tea, jasmine tea, vegetable seeds, etc. Please note that the last two adjustments should not be considered disadvantageous to international companies. China is indeed interested in developing local brands and fostering its self-sufficiency capabilities, and as such, it rolls out policies that help the country achieve its growth ambitions. Nevertheless, while it may be argued that China’s new directives reflect its national priorities, China doesn’t abandon its interest in attracting foreign capital. This is doubly true in industries where foreign companies can fill in the local gaps and incapacities. Thus, China leaves the door open for international companies to deepen their foothold in the Chinese market and reinforce their business ties with China and local Chinese customers.

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