China cuts import tariffs on some consumer goods including baby formula
Beijing: China said it will further cut import taxes for a wide range of consumer goods including several categories of baby formula, in a bid to boost consumption. The country’s dairy stocks fell.
The average tariffs for 187 product categories ranging from baby diapers to blue cheese, coffee machines and ski equipment will drop from 17.3% to 7.7% after the cut, the ministry of finance said in a statement on its website on Friday. The change will be effective from 1 December.
China has faced criticism for not doing enough to bolster imports, a move that would help balance the trade surpluses that it runs with a raft of other countries. Commerce minister Zhong Shan said this month that a range of measures to open domestic markets will be taken to support demand for imports, a move that could help narrow the $327 billion trade gap with the US.
Tariffs for some types of baby formula were cut to zero, triggering losses in Chinese dairy stocks. Inner Mongolia Yili Industrial Group Co. retreated as much as 4%, while China Modern Dairy Holdings Ltd. lost as much as 2% in Hong Kong. China Mengniu Dairy Co. slipped more than 1% with Yashili International Holdings Ltd.
“People’s consumption demand is on the rise,” the ministry said. “This round of tariff cuts focused on quality and specialty products that are in high demand and connected closely with people’s daily life while they often can’t be supplied domestically. It’ll enrich options for consumers and boost an upgrade of supply.”
Taxes for a range of medicine products were lowered to 2% from 6%, while the biggest reduction came for vermouth or similar alcohol, from 65% to 14%, according to the statement.
China will host its first-ever import fair in November next year, and will roll out tax, fiscal and administrative initiatives aimed at helping foreign firms sell more into what is becoming a big and sophisticated consumer market, minister Zhong said earlier this month. Bloomberg