On January 1st, a provisional import tariff rate lower than the MFN tariff rate was imposed on 883 commodities.

On January 1st, the provisional import tariff rate for 883 commodities was lower than the MFN tariff rate-
Import tariff reduction "spree" is coming.

The tariff has dropped again! The Customs Tariff Commission of the State Council recently issued a notice to impose a provisional import tariff rate lower than the most-favored-nation tariff rate on 883 commodities from January 1, 2021, in order to support the construction of a new development pattern with the domestic cycle as the main body and the domestic and international dual cycles promoting each other. Insiders pointed out that the adjustment measures will help reduce the import cost of China, better attract global resource elements, not only meet domestic demand, but also provide broader market opportunities for countries, better connect the domestic market with the international market, and help build a new development pattern.

Adjust tariffs year after year, why?

Tariff has the functions of ensuring national fiscal revenue, regulating social and economic activities and protecting domestic economic interests in foreign trade and economic cooperation. Since the reform and opening up, China has made full use of tariff means such as levy, reduction, exemption and refund to promote the national economic development. It can be said that the change of tariff witnessed the development of foreign trade.

Perfecting legislation and formulating policies-Since January 1st, 1980, China resumed the customs to levy tariffs on foreign trade import and export goods. In January 1985, the State Council deliberated and passed the Regulations on Import and Export Tariffs of People’s Republic of China (PRC), and the customs began to levy tariffs according to the Customs Import and Export Tariff of the People’s Republic of China determined by the tariff regulations; On July 1, 1987, the Customs Law of People’s Republic of China (PRC) was promulgated and implemented. Based on the Customs Law and tariff regulations, a series of supporting regulations were also promulgated.

Actively participate in the formulation of international rules-in 1992, China joined the International Convention on the Harmonized System; In June, 2015, China took the lead in formulating the first World Customs Supervision and Service Guidance Document on Cross-border E-commerce, World Customs Organization Standard Framework for Cross-border E-commerce, and China Customs’ influence and voice in the formulation of international economic and trade rules are constantly improving.

Optimize the tax system-In recent years, China has reduced import tariffs on consumer goods such as clothing, bags, shoes and boots, specialty foods and medicines for many times.

Since May 1, 2018, China has reduced the import tariff of all common drugs, including anticancer drugs, alkaloid drugs with anticancer effect and actually imported Chinese patent medicines to zero by means of provisional tax rate. On November 1st of the same year, China reduced the import tariff of 1,585 items, and the total tariff level was reduced from 9.8% to 7.5%.

Since January 1, 2019, China has imposed provisional import tax rates on 706 commodities, and imposed zero tariffs on important raw materials urgently needed for domestic production of drugs for treating cancer and rare diseases, involving 63 varieties under 31 tax items.

Since January 1, 2020, China has imposed a provisional import tariff rate lower than the most-favored-nation tariff rate on 859 commodities, and continued to impose an agreed tariff rate on some commodities originating in 23 countries or regions.

In 2021, China adjusted its import tariffs again and sent out a "gift package" of policies to benefit people’s lives and promote the economy. According to the notice of the State Council Customs Tariff Commission, since January 1st this year, China has imposed a provisional import tariff rate lower than the MFN tariff rate on 883 commodities.

"Most-favored-nation tax rate is the tax rate applicable to the goods imported by most countries in China. The provisional tax rate refers to the tariff rate imposed on some imported and exported commodities within a certain period of time. The provisional tax rate is generally lower than the MFN rate, which is a common way to adjust tariffs independently. " Zhang Jianping, deputy director of the Academic Committee of the Research Institute of the Ministry of Commerce and director of the Regional Economic Research Center, explained, "At the end of each year, China will adjust the tariff rate of some imported goods, mainly to adapt to the economic and social development. Over the past 70 years, the development and changes of China’s tariffs have witnessed the glorious course of China’s foreign trade from small to large and from weak to strong. This adjustment fully reflects the basic idea of the country to meet the needs of the domestic super-large-scale market through imports. With China’s in-depth participation in and promotion of the process of economic globalization and the formation of a more comprehensive and higher-level open economy, the door of China’s opening to the outside world is getting wider and wider. "

Benefit people’s livelihood, improve quality and promote upgrading.

Specifically, this new round of tariff adjustment reflects three ideas:

Reduce the economic burden of patients and improve people’s quality of life. The tariff adjustment plan is clear, and the second batch of raw materials for anticancer drugs and rare diseases, foods needed by special children, etc. will be subject to zero tariffs, and the import tariffs on medical equipment such as artificial heart valves and hearing AIDS will be reduced, and the import tariffs on raw materials for infant milk powder such as whey protein powder and lactoferrin will be reduced, even by 50%.

"This not only shows that the country continues to implement the concept of people-oriented and people’s livelihood, but also meets the people’s longing for a better life and the demand for baby milk powder in the domestic market." Zhang Jianping said, "The continuous release of tariff policy dividends highlights the orientation of’ benefiting people’s livelihood’. Consumers and patients can actually reduce expenses and get tangible benefits. "

Better meet domestic production needs and promote high-quality economic development. In order to meet the needs of domestic production, the adjustment plan clearly further reduces the import tariffs on some equipment, spare parts and raw materials needed for new infrastructure or high-tech industries such as fuel cell circulating pumps, aluminum silicon carbide substrates and arsenic alkanes, from 5%-8% to 2%-4%. At the same time, from the perspective of high-quality economic development, the new round of tariff adjustment has also reduced the import tariffs on some energy-saving and environmental protection products. For example, as an important part of automobile energy saving and emission reduction, the import tariff of exhaust gas recirculation valve is reduced from 7% to 5%.

In addition, a lower provisional import tax rate is imposed on aviation equipment such as fuel pumps for aircraft engines to promote international cooperation in the aviation field; Reduce the provisional import tax rate of wood and paper products, non-alloy nickel, unwrought niobium and other commodities to encourage the import of resource products, and moderately reduce the sliding duties of cotton; From July 1, 2021, the sixth step will be implemented to reduce the MFN tariff rate of 176 information technology products.

"Reducing import tariffs on these commodities can effectively reduce the import cost of high-tech equipment and parts, domestic scarce resources and some high-quality raw materials needed for domestic industrial upgrading, which is conducive to accelerating the modernization, digitalization and intelligence of domestic industries and promoting domestic industrial upgrading." Zhao Ping, vice president of China Council for the Promotion of International Trade Research Institute, said.

Emphasize both economic development and environmental protection. According to the adjustment plan, in order to implement the Law on the Prevention and Control of Environmental Pollution by Solid Wastes, the provisional import tax rate of solid wastes such as metal scrap will be cancelled and the MFN tax rate will be resumed from January 1, 2021. "With the development of domestic economy, it has become a social consensus to build an ecological civilization, give priority to environmental protection and ensure public health. In the past few years, China has banned the import of various types of electronic waste, which is also due to this consideration. " Zhang Jianping said, "This reflects the development concept of emphasizing ecological civilization construction in the process of pursuing high-quality development and’ double cycle’, raising the standard of environmental protection and reducing energy consumption."

"Overall, this tariff adjustment will have a positive supporting effect on domestic consumption, and residents’ sense of acquisition and happiness will also be effectively improved, which will not only meet domestic demand, but also enhance the level of industrial technology development in China and promote the formation of a grand and smooth domestic economic cycle." Zhang Jianping said, "At the same time, it is conducive to building a high-standard free trade zone network facing the world, better connecting the domestic market and the international market, promoting the common development of China’s economy and the world economy, and promoting win-win cooperation."

Expand the "circle of friends" and share the development dividend

In addition to meeting domestic demand, adjusting the continuous release of import tariffs and accelerating the expansion of opening-up signals, it also reflects China’s determination to expand its "circle of friends" and promote sharing and win-win.

In order to promote the high-quality development of the "Belt and Road" and realize high-quality introduction and high-level going out, according to the free trade agreement or preferential trade arrangement signed and effective between China and relevant countries or regions, in 2021, China will implement the agreed tax rate on some imported goods originating in relevant countries or regions. Among them, the China-Mauritius FTA came into effect on January 1, 2021 and implemented tax reduction.

The head of the World Trade Department of the Ministry of Commerce said that the agreement was comprehensive, high-level and mutually beneficial, which contributed to the construction of a closer community of destiny between China and Africa and filled the gap in the existing free trade zone network structure in China. After the agreement came into effect, in the field of goods trade, the proportion of product tax items that China and Mauritius finally achieved zero tariff reached 96.3% and 94.2% respectively. In the field of service trade, both sides promised to open more than 100 sub-sectors. In the field of investment, China upgraded its original investment protection agreement with African countries for the first time. Yang Baorong, deputy director of the west asia and africa Institute of China Academy of Social Sciences, said that the Agreement not only provides a stronger institutional guarantee for deepening the economic and trade relations between the two countries, but also gives a brand-new connotation to China-Africa comprehensive strategic partnership of cooperation and raises China-Africa economic and trade cooperation to a new height.

In addition, China’s free trade agreements with New Zealand, Peru, Costa Rica, Switzerland, Iceland, Pakistan, Chile, Australia, South Korea and Georgia and the Asia-Pacific Trade Agreement have been further reduced. Some imported goods originating in Mongolia will be subject to the Asia-Pacific Trade Agreement tax rate from January 1, 2021. In 2021, the preferential tax rate will continue to be applied to the 43 least developed countries that have established diplomatic relations with China and completed the exchange of letters, and the scope of goods to which the preferential tax rate applies and the tax rate will remain unchanged.

Liu Xiangdong, a researcher at the Economic Research Department of China Center for International Economic Exchanges, said that the members of the Asia-Pacific Trade Agreement, namely Bangladesh, China, India, Laos, South Korea, Mongolia and Sri Lanka, are the main emerging markets that can be tapped along the Belt and Road. With the global epidemic raging and trade protectionism on the rise, continuing to adhere to the foreign policy tone of free trade will not only help maintain an open world economy and jointly cope with external shocks, but also further strengthen value chain cooperation and promote the development of Asia-Pacific production networks to a higher level.

"China proposed to promote the construction of the Belt and Road with high quality, build a global free trade zone network that radiates the Belt and Road, and implement agreed tax rates on imported goods from these partners, countries or regions of the Belt and Road, reflecting China’s willingness to share China’s big market and high growth with these partners." Zhang Jianping said, "At the same time, this will also help China and its partners in the Belt and Road to form complementary advantages, cooperation and interaction, and help to form a new pattern of opening up and international economic and trade cooperation with the coordinated development of’ bringing in’ and’ going out’."

This adjustment is the first step of opening up in 2021, and a series of policy dividends with greater strength and wider coverage will be released soon: "Catalogue of Industries Encouraging Foreign Investment 2020 Edition" will be implemented from January 27, 2021; In 2021, China will continue to implement the agreed tax rate for relevant countries or regions. "It is foreseeable that China will further expand its opening up this year, especially to modern service industries such as finance and high-end manufacturing industries, continuously optimize the domestic business environment, and build a high-level open new highland." Liu Xiangdong said.(Reporter Kong Dechen)