Tariffs And Non-Tariffs Are Used To Control Chinese Imports

Import tariffs are applied to the CIF value as well as a few specific and compound duties on the volume of imported goods; there are also such tariffs as the Value Added Tax and the Consumption Tax.  Non-tariff measures include: import licenses, quota control, and a restricted import list.  In general, tariff rates on raw materials and industrial supplies are relatively low, usually less than 20%.  Much higher rates are placed on consumer goods, usually 20-50%.  On rare occasions this tariff has been known to go as high as 100% in selected luxury items.  Some selected countries have concluded trade treaties or reciprocal favorable tariff agreements and get to have a more preferential tariff duty than others.

The Value Added Tax is imposed on all commodities as well as import tariffs. The basic rates for food, drinking water, natural gas, coal, gas, petroleum, books, newspapers, magazines, feed for the animals, chemical fertilizers, pesticides, agricultural machinery, and plastic sheeting for agricultural products seem to range from 13 and 17%.

A Consumption Tax ranging from 3 to 45% is imposed on such items as: cigarettes, liquor, cosmetics, skin and hair care products, jewelry, fireworks, petroleum, diesel oil, automobile tires, motorcycles, scooters and small motor vehicles.  This tax is imposed on 20 commodities regardless of trade, geographical location or entry of imports; these commodities are namely: television sets, video cameras, video cassette recorders and players, hi-fi systems, air-conditioners, refrigerators, washing machines, cameras, copy machines, program-controlled telephone switching, micro-computers, telephones, radio pagers, fax machines, electronic calculators, typewriter and word-processors, furniture, lighting fixtures, and foodstuffs.

As for non-tariff measures, China has introduced a licensing and quota system to control imports.  Presently, 35 product categories consisting of about 374 items are subject to Import Licensing Control.  Chinese Importers are required to obtain approval and licensing from the State Development Planning Commission, MOFTEC, and the Mechanic and Electronic Products Import and Export Department before importing.  Some imports are subject to both licensing and quota controls.  Imports fall into two major categories: the first, 15 machinery and electronic products; and the second, 13 general commodities.  The enforcement agency for the quota system is the State Development Planning Commission.  It is their responsibility to place quotas on general commodities whereas MOFTEC is responsible for placing quotas on the import as well as the export of machinery and electronic products.

Mandatory Inspection by the China Commodity Inspection Bureau (CCIB) on twenty categories of import and 47 categories that are subject to Safety Controls.  Within these categories, the CCIB forbids the import of commodities that are less than the Chinese National Standards for these commodities.  Import of wastes for dumping, stacking, disposal or use for raw materials is strictly prohibited.

Policies Regarding Imports By Foreign-Invested Enterprises

·       Vehicles and office supplies are subject to their relevant tariffs and regulations.

  • Between April ‘96 and December ‘97, as "encouraged" or "restricted (II)" in the "Catalogue of Industries for Guiding Foreign Investment", production equipment is exempt from import duties except for those listed in the "Catalogue of Non-Duty-Free Commodities to be Imported for Foreign-Funded Projects.”
  • January ‘98, equipment imported which are engaged in projects classified as "encouraged" or "restricted (II)" in the "Catalogue of Industries Guiding Foreign Investment" are exempt from import duties upon presentation of a Letter of Project Confirmation except for those listed in the "Catalogue of Non-Duty-Free Commodities to be Imported for Foreign-Funded Projects.”

With the entrance of China into the WTO, China will no longer be able to continue its practice of using tariffs and non-tariffs to prevent foreign goods form entering its marketplace.  China will begin to attach greater importance to the use of anti-dumping measures permitted by the WTO as a practical means of maintaining fair trade.  It is not to far into the foreseeable future that you will begin to see an increase in the number of anti-dumping cases and that there will be an increase in the legal issues relating to anti-dumping measures that will become increasingly more complicated.  In order to comply with the provisions of the anti-dumping agreement of the WTO and to meet the needs of China's anti-dumping efforts, China will have to begin developing and improving its anti-dumping legislation and anti-dumping mechanisms.

 

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