Pork, avocados and tech: China to cut more import tariffs

Tariffs on frozen foods and other products will be lowered from January 2020, and those for tech goods in July 2020.

    China's finance ministry announced lower import tariffs for several consumer goods starting January 1 [File: Qilai Shen/Bloomberg]
    China's finance ministry announced lower import tariffs for several consumer goods starting January 1 [File: Qilai Shen/Bloomberg]

    China will lower tariffs on products ranging from frozen pork and avocados to some types of semiconductors next year, the finance ministry said, as Beijing looks to boost imports amid a slowing economy and a trade war with the United States.

    Next year, China will temporarily cut import tariffs on more than 850 products, the finance ministry said. The new rates are lower than those applied to other members of the World Trade Organization, also known as most-favoured nations.

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    China's economy is growing at its weakest rate in nearly 30 years and analysts say it could face more downward pressure next year. But the government has focused on using both monetary and fiscal policies to keep growth at about 6 percent in 2020.

    The tariff rate for frozen pork will be cut to 8 percent from the most-favoured nation duty of 12 percent, while the rate for frozen avocado will be reduced to 7 percent from the most-favoured nation duty of 30 percent, said the ministry in a statement on its website.

    China's supply of pork has been drastically cut this year due to an outbreak of African swine fever, sending prices for its staple meat soaring.

    In addition to lower levies on consumer goods, tariffs for some asthma and diabetes medications will be set at zero, said the finance ministry, while duties on some wood and paper products will be lowered too.

    Import tariffs on multi-component semiconductors will be cut to zero, it added.

    China will also further lower most-favoured nation import tariffs on some information technology products from July 1, said the ministry.

    Goods from New Zealand, Peru, Costa Rica, Switzerland, Iceland, Singapore, Australia, South Korea, Georgia, Chile and Pakistan will have even lower levies under the renegotiated free trade agreements with China, according to the finance ministry.

    The country has been cutting import tariffs since 2017 and its leadership has reiterated its intention to further lower duties in order to meet domestic consumption needs and to open the economy further.

    The move is not directly related to the continuing negotiations towards a deal to end the trade war with the US and follows a similar move last year.

    In addition to lowering its import tariffs, China will also take significant steps to open up sectors ranging from oil and gas to telecommunications and railways, according to a government statement published by the official Xinhua News Agency.

    The government will offer more tax breaks and broaden incentives to more firms, aiming to ease market regulations and lower financing costs for companies.

    The move is expected to help the government tap a market where it has 27 million private firms employing more than 340 million people and accounting for 60 percent of the economy.

    To help companies raise funds, the Chinese government will back the bond issuance of these companies and lower the threshold for new convertible bonds.

    It will also draw new investors by allowing funds held by asset management and insurance firms to invest in private equity funds to ease the struggles faced by some private companies.

    The government is also further lowering financing costs for smaller private companies and is seeking to set up financial institutions that provide services mainly to these firms. China said it will improve legal protection for private companies and the assets held by entrepreneurs.

    SOURCE: News agencies