Against the backdrop of the collective ongoing global supply chain crisis, the Chinese government is actively creating more opportunities for international brands to facilitate cross-border trade with China. One such measure is the positive adjustments made in China’s import & export tariff rates. While these new directives reflect China’s agenda and national priorities for the coming years, they also leave the door open for international companies to reinforce their business ties with China and with local Chinese customers.
Keep reading to find out which products will be subject to lower tariff rates and whether your company can take advantage of these changes.
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1 – Reduced tariffs on 954 imported products
Starting from January 1st 2022, these 900+ commodities that were previously subject to higher MFN (most-favored-nation) tariff rates, are now subject to lower rates, and belong to a wide range of sectors such as medical products, automotive, manufacturing components, raw materials, environmental restoration, sports equipment, and others benefitting from lower tax bands and subsequently more ability to price competitively.
But note that in order to balance the new reduced tariff rates, at the same time, China is to cancel the provisional import tariff rate and re-impose higher import and export duty rates on other products such as meat, batteries, phosphorus, etc., which are currently deemed as lower priority for China’s trade criteria.
Read more about MFN duty rates and other custom duty for China imports
2 – Reduced conventional duty rates on commodities from 29 countries
Starting from January 1st, exporters from the 29 countries who have bilateral trade agreements with China (e.g., Australia, New Zealand, Switzerland, Singapore, Vietnam, Japan, and more) and the APAC Trade Agreement’s members enjoy a further reduction of the conventional duty rates on imported and exported taxable items.
3 – Reduced MFN duty 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 duty rates. This is the seventh time China has applied such an act, with the last one taking place in July 2021 for 176 IT products.
Read more about the costs of logistics in China and other financial considerations for doing business in China in the comprehensive financial guide for foreign companies in China.
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Logistics efforts inspire business opportunities in China
Alongside the reduced importation and exportation costs, another factor that is expected to trigger regional trade and foreign investments in China is the implementation of the Regional Comprehensive Economic Partnership (RCEP) in January 2022. These 15 partnering countries account for about one-third of the world population, and together they’ve collaborated to create the world’s largest trade deal. With the partnership in place, over 90% of the goods traded between the RCEP members will be tariff-free.
In addition, the China-Europe freight trains play a significant part in stabilizing the international supply chain and mitigating the supply chain management challenges. These trains travel across 70 routes between China and 170 cities from 23 European countries, cutting shipping times by half compared to the sea transportation route. The trains provide opportunities for European cities that could have remained isolated due to global transport difficulties and landlocked countries without ports. For instance, in October 2021, the first train to deliver items for the CIIE arrived from Hamburg, Germany, to Shanghai, carrying 35 containers and 460 tons of goods destined to display at the exhibition.
In terms of logistics in China, the Chinese government is taking measures to boost online and offline cross-border trade, inviting international brands to deepen their foothold in the Chinese market. 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.