8 Oct 2018
China to Introduce Further Tariff Cuts and Opening-up to Foreign Investors
China is to cut tariffs on 1,585 imported items from 1 November 2018 onwards. In more specific terms, the affected tariffs are as follows:
- The average tariff rate for mechanical and electrical equipment, such as industrial machinery and instruments, will fall to 8.8% from 12.2%;
- The average tariff rate for textiles and building materials will fall to 8.4% from 11.5%;
- The average tariff rate for resource products and primary processed products, such as paper goods, will fall to 5.4% from 6.6%;
- There will also be an overall reduction in the number of tax brackets applicable to goods in the same or similar categories.
Tariff cuts introduced to date are estimated to have reduced the corporate and consumer tax burden by nearly RMB60 billion, while lowering China’s overall tariff rate from 9.8% in 2017 to 7.5% for the current year.
This latest round of tariff cuts was agreed at an Executive Meeting of the State Council on 26 September. During the same session, plans to expedite customs clearance procedures were also given the go-ahead. This will see the number of customs clearance documents subject to verification at ports reduced to 48 (from 86) by 1 November this year, while a number of irregular charges will be entirely abolished.
It was also agreed that a more proactive strategy of opening-up should be adopted as a means of fostering a fairer, more convenient and more conducive environment for foreign investment. In line with this, previously agreed plans to delegate power, streamline administration and improve public services will be even more far-reaching, with unified market access criteria set to apply to both domestic and foreign investment in all sectors not covered by the Negative List and to all enterprises regardless of ownership structure.
In a further move, the withholding tax deferral policy for reinvestment, as it applies to foreign investors in China, will be extended beyond just the designated priority projects currently within its remit to all sectors and projects that are not featured on the Negative List. The meeting also resolved to ensure intensified protection of all intellectual property rights, while enhancing overall government oversight and maintaining a legally-compliant regime.
For further details (in Chinese), please visit the following link: