By Tang Guhan
Chinese policymakers have announced they will scale down the consumer goods’ tariffs on Wednesday. The new policy will be enforced from July 1, 2018, as reported by the China Securities Journal.
The stock prices for drinks, food, tourism and retail stocks jumped on Friday after the announcement.
In detail, the duties for clothing, kitchenware, and physical fitness imports will be reduced from 15.9 percent to 7.1 percent, household appliances like washing machines and refrigerators have been cut by 12.5 percentage points to 8 percent while aquatic products have been lowered from 15.2 percent to 6.9 percent. The tariffs for cosmetics dropped by 5.5 percent.
Chinese securities companies believed the opening up of imports would help facilitate in the transformation and escalation of the products and services for their counterparts domestically.
The move will give momentum to domestic demands for consumption. The lowered tariffs on consumer goods closed the price gaps at home and abroad, which lead to inflows of consumption from abroad into China. Furthermore, it will help transform China’s economy into a high-quality growth, said analysts.
The China Securities Journal reported Chinese policymakers are planning a further reduction on tariffs across watches, glasses, maternal and baby supplies as well as jewelry.
Consumer demand for high quality imported goods have increased as their income grows, as stated in a report by China’s Ministry of Commerce, 86.6 percent of consumers whose family income exceeded 20,000 yuan per month, intended to buy or had already purchased imports within the year. Their attention focused on areas of cosmetics, infant products, clothing, and watches.
Maternal and baby supplies market in China has seen a rapid growth rate in recent years. The market value of the Chinese markets has grown at a 15 percent compounded rate to 3 trillion yuan, according to data from Roland Berger, an international consulting firm.
