In December of 2021, multiple significant documents regarding custom duties were released by the Customs Tariff Commission of the State Council:
· On December 15, 2021, the Tariff Adjustment Plan (hereinafter referred to as “the Plan”) was issued.
· On December 31, 2021, the Customs Import and Export Tariffs of the People's Republic of China (2022 Version) was released.
The key adjustments noteworthy for relevant enterprises:
· Lowering tariff rate on 954 commodities based on the default most-favoured-nation (MFN) tariff level. Effective from January 1, 2022, China has imposed interim tariff rate on certain commodities. Among those commodities are:
o Anti-cancer drugs and medical products. More specifically, China has imposed zero-tariff treatment on radium chloride injections, a new anti-cancer drug. As for medical products, China has reduced the import tariffs on intracranial thrombectomy stents, artificial joints, etc.
o Gasoline engine particle traps and electronic throttles for automobiles,
o Key components in the manufacturing sector, such as high-purity graphite accessories, high-voltage cables for high-speed trains, membrane electrode assemblies, and bipolar plates for fuel cells,
· Further reduction of MNF tariff rate on 62 IT products in compliance with China’s commitment made in Information Technology Agreement in 2015. The general tariff rate on IT products will be around 7.4%.
· Imposing agreed tax rates on selected products from 29 countries and regions in accordance with the free trade agreements (FTAs) and the preferential trade arrangement between China and those countries. Those FTAs and trade arrangement include:
o Bilateral FTAs between China and New Zealand, Peru, Costa Rica, Switzerland, Iceland, South Korea, Australia, Pakistan, Georgia, and Mauritius.
o Asia-Pacific Trade Agreement (APTA)
o Regional Comprehensive Economic Partnership (RCEP)
o the China-Cambodia FTA effective from January 1, 2022
· Granting zero-treatment tariff to the least developed countries. This preferential tariff treatment will only grant to those that have established diplomatic relations and completed the exchange of letters with China.
· Increasing the export tariff on types of phosphorus other than yellow phosphorus and crude copper
Local experts portray the purpose of the tariff adjustments as China’s efforts to achieve high-quality development and fight against the backdrop of the outbreak of pandemic. Lowering import tariffs could hopefully have positive effects on China’s economic recovery and global trade. It could also provide opportunities for foreign enterprises in certain fields to enter the Chinese market. Moreover, tariff reduction may additionally help facilitate the integration of global industrial chains, supply chains and value chains, and boost the cross-border investment. These tariff adjustments show China’s determination towards promoting high quality openness and globalization. Such measures may also provide indirect support the upgrade of China’s manufacturing sectors, while improving the fuel efficiency and the vehicle exhaust emission for green and low-carbon transition.
What’s also worth attracting the attention of import/export stakeholders is that China has adjusted its harmonized system codes (HS Code) based on the Harmonized Commodity Description and Coding System (2022 version). The total number of import tax items has been changed to 8930 in a bid to meet the requirements for industrial development and the supervision on trade. Relevant enterprises are advised to stay up to date with the update and the adjustment as well.
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