What are the highlights of China's tariff adjustment in 2024?
At the end of each year, our Congress adjusts the tariff rates for some imported and exported goods based on economic and social development. With the approval of the State Council, the State Council Tariff Commission has issued a public announcement clarifying China's tariff adjustment plan for 2024.
Experts and industry insiders have stated that this adjustment has reduced import tariffs on various commodities such as pharmaceuticals, raw materials, intermediate goods, and components, and adjusted and optimized the agreed tax rates and domestic tax items, which will help safeguard people's lives and health, better meet the needs of enterprise production and social development, and expand high-level opening-up to the outside world.
Ensuring people's livelihoods: implementing zero tariffs on certain drugs and raw materials
According to the announcement, starting from January 1, 2024, China will implement temporary import tax rates lower than the most favored nation tax rate for 1010 goods.
The use of tariff leverage to focus on people's livelihood concerns is a major focus of this temporary tax rate adjustment. The reporter found in the appendix of the announcement that China will implement zero tariffs on some drugs and raw materials used to treat cancer and rare diseases, and reduce import tariffs on formula foods for special medical purposes.
Specifically, drugs and raw materials with zero tariffs will be implemented next year, including anti-cancer drugs used to treat liver malignancies and rare disease drug raw materials used to treat idiopathic pulmonary hypertension. In addition, zero tariffs will be implemented on inhaled ipratropium bromide solution, which is widely used in clinical practice for the treatment of childhood asthma related diseases.
Since 2018, China has successively cancelled import tariffs on the first and second batches of anti-cancer drugs, rare disease drugs, and related raw materials.
In the view of Chen Wei, Deputy Director of the Clinical Nutrition Department at Peking Union Medical College Hospital of the Chinese Academy of Medical Sciences, China's continuous adjustment of import tariffs around drugs and raw materials that are of great concern to the people and have high clinical needs will help better safeguard people's health and safety, and better achieve "medical treatment for illness".
"Special medical formula foods can meet the special nutritional or dietary needs of people with restricted eating, digestive and absorption disorders, metabolic disorders, or specific disease states, which is beneficial for ensuring the life, health, and physical recovery of special populations. For example, patients with kidney disease, liver disease, and other related diseases are in great need." Chen Wei said.
Promoting Innovation: Multiple Tariff Adjustments Promote Innovative Development of Manufacturing Industry
According to the announcement, in 2024, China will also reduce import tariffs on some raw materials, intermediate goods, and components, and accelerate the innovative development of advanced manufacturing industry.
Among them, import tariffs on key equipment and components such as gas diffusion layers for fuel cells and generator sets equipped with spark ignition piston internal combustion engines using biogas as fuel will be reduced. Industry insiders say that this will better meet domestic production needs and accelerate the innovative development of China's advanced manufacturing industry.
The import tariffs on resource commodities such as lithium chloride and cobalt carbonate will also be lowered next year.
"The tariff adjustment this time is not small." According to Huang Yonghe, a senior chief expert at China Automotive Technology Research Center Co., Ltd., commodities such as lithium chloride, cobalt carbonate, and crude nickel cobalt hydroxide are key raw materials for the new energy vehicle industry. Lowering tariffs can help enterprises reduce production costs and promote the development of the new energy vehicle industry.
According to the needs of industry development, next year, the original 5 related steel product tax items will be further subdivided into 10 tax items based on different performance indicators, involving steel for automobiles, ships, etc.
Tax items are known as the "language" of trade and are of great significance in strengthening import and export management, implementing trade and industrial policies. Industry insiders say that further subdivision of the tax items this time is conducive to promoting China's high-end steel products to better participate in international market competition, and promoting the healthy and orderly development of the steel industry.
Expanding openness: implementing treaty tax rates for 30 countries or regions
The announcement released this time clearly states that in accordance with the free trade agreements and preferential trade arrangements signed between China and relevant countries or regions, the treaty tax rate will be applied to some goods originating from 30 countries or regions under 20 agreements in 2024.
"It can be said that China's' circle of friends' in foreign trade is becoming larger and larger, further demonstrating China's determination to promote the construction of a high standard free trade zone network and promote high-level opening up to the outside world," said Gao Lingyun, a researcher at the Institute of World Economy and Politics at the Chinese Academy of Social Sciences.
Among them, the China Nicaragua Free Trade Agreement will implement its first tax reduction in 2024. After the final tax reduction is completed in the future, more than 95% of the tax items on both sides will achieve zero tariffs. "This will help further stimulate the potential of bilateral trade cooperation, promote close economic and trade cooperation between China and Nepal, and benefit the people of both countries," said Gao Lingyun.
In 2023, China also signed free trade agreements with Ecuador and Serbia, and will promptly implement tariff reductions based on the progress of the agreements, further expanding the global network of high standard free trade zones.
In addition, to support and assist the least developed countries in accelerating their development, preferential tax rates will continue to be implemented in 2024 for the least developed countries that have established diplomatic relations with China and completed the exchange of documents procedures.
Overall, the tariff adjustment arrangements in China in 2024 will be conducive to supporting the stability of the basic situation of foreign trade and investment, and better serving the overall economic and social development; Beneficial for promoting the continuous enhancement of endogenous power, better coordinating development and security; Beneficial for promoting high-level opening-up to the outside world and building a new open economic system; It is conducive to promoting industry transformation and upgrading, and actively participating in international market competition.