Source: Global Times Published: 2018-9-26
The State Council, China's cabinet, announced Wednesday that the government will further cut import tariffs effective November 1, a move that shows China's adherence to further opening-up, said experts.
The overall tariff level will be reduced to 7.5 percent from 9.8 percent in 2017, with 1,585 items involved, the State Council said during a meeting chaired by Premier Li Keqiang on Wednesday, according to the official website of the Chinese government.
Average tariffs for machinery and electrical equipment - one of China's biggest imports by value - will be reduced to 8.8 percent from 12.2 percent.
Tariffs on textile products and construction materials will decrease to 8.4 percent from 11.5 percent, while the tariff on paper products will be lowered to 5.4 percent from 6.6 percent.
The cuts are expected to lower costs for consumers and enterprises by about 60 billion yuan ($8.73 billion) this year, said the cabinet.
Zhao Xiao, a professor at the University of Sciences and Technology in Beijing, told the Global Times Wednesday that tariff cuts constitute a very important step in China's further opening-up amid escalating trade tensions with the US.
China has firmly decided to further open the market wider and realize its pledge, as the new gesture shows, in stark contrast to the rise of protectionism and unilateralism, Zhao noted.
"China has not and definitely will not dance with the US on trade protectionism. We have our own direction for globalization and becoming more market-oriented. In this process, we should stick to our pace," said Wan Zhe, chief economist with the International Cooperation Center of the National Development and Reform Commission.
"Although there is still some scope for our market mechanisms to improve, China is constantly putting the pressure on itself instead of blaming development bottlenecks on others like the US," Wan told the Global Times Wednesday.
Along with the fresh tariff cuts, the State Council also rolled out more specific support for foreign companies in China.
Qualified foreign projects will be included in the category of major construction projects, or will be supported in terms of rights to use land and sea, while being listed in related industrial plans via quicker procedures and lower-cost logistics, said the State Council.
An expansion of the foreign investment scale is encouraged. The policy under which foreign investors are temporarily exempt from withholding income tax will be applied to all foreign-funded projects and areas that are not forbidden, rather than the previous policy covering only projects that are encouraged.
"China is ramping up efforts to attract foreign investment as the focus of trade tensions between the world's two largest economies has evolved from pure trade tariffs to competition for advanced technologies, and for capital," Zhao noted.
According to Wan, as the competition becomes fiercer, the need for talent and enterprises - two micro aspects embodied in foreign capital for the Chinese market - has become more intense.
She noted that China has successfully attracted foreign investment and cultivated local talent over the past four decades since reform and opening-up began.
"Lower institutional costs and a better business environment are set to continue, which will persuade foreign capital to stay."
Wan Zhe is a visiting fellow of Chongyang Institute for Financial Studies at Renmin University of China.