Is your company engaged in importation-exportation processes with China? We have some good news for you.
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? This might be good timing for your business to enter the Chinese market.
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Provisional tariff rates on 1,010 imported commodities
Every year China reassesses the areas where reduced tariff rates are most needed to promote its current agenda and priorities. As a direct continuation to last year, 2024’s Tariff Adjustment Plan persists in offering advantages in the fields of healthcare, innovation, and advanced manufacturing. Starting from January 1st, 1,010 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. 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 rare diseases drugs are subject to a zero-tariff rate, aiming to relieve the economic burden of patients and workers who have suffered from financial losses in the past several years.
- Advanced manufacturing: Companies that manufacture in China and leverage their advanced manufacturing capabilities enjoy unmatched benefits regarding 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.
- Industrial supply chain: Some raw materials for industrial use are now subject to zero-tariff; others can enjoy reduced import tariff rates (such as lithium chloride, low-arsenic fluorite, and gas diffusion layers, aiming to promote sustainable and environmentally friendly economic and industrial development.
- Foods & seeds: To better cater to Chinese consumers and support their health-based consumption habits d, several food products (such as formula food, sweet corn, coriander, burdock seeds, etc.).) are now subject to lower import tariff rates.
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Reduced conventional tariff rates on commodities from 30 countries
Starting from January 2nd, exporters from the 30 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.
👉 Are you 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. In 2024, as part of China’s commitments to the World Trade Organization, some of the commodities subject to raised import tariffs are materials such as ethylene, propylene, and liquid crystal glass. Moreover, the government expanded the list of commodities subject to import and export tariffs with an additional 9 items, totaling 8,957 products altogether. These 9 items include mainly household and manufacturing products such as decorative base paper, high-end steel products, 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.
Get in touch to explore what opportunities await your business and find out if you are eligible for any financial incentives to initiate your China journey.