China has announced changes to its trade tariffs in an effort to boost economic growth and reduce its reliance on foreign investment. The move, which affects consumer goods including avocados, baby carriages and mineral water, comes following increasing pressure from the US, the European Union and other trade partners for better access to its markets.
Leaders in China are stepping up their efforts to achieve a self-sufficient economy, and to improve its economic growth from consumer spending rather than relying on foreign trade and investment. Foreign products are often considered higher quality, safer or cheaper, which has resulted in increased spending by Chinese tourists on basic items including clothes, shoes and cosmetics.
According to a statement from the finance ministry, these developments are designed to “enrich consumption choices” by reducing import duties on products by as much as 65%. The news follows similar cuts in 2015, which included items like clothes and shoes. It’s thought that by encouraging customers to buy foreign products from Chinese retailers instead of from overseas, there will be a boost in jobs the country. “
A statement from the ministry said that “We know that consumer products are not products of high value and we can’t depend on them to achieve a fundamental turnaround for China’s trade imbalance. But step by step, it may work if we keep doing things that are mutually beneficial to both sides and good to the markets.”
China reported a global trade surplus of $510 billion last year, and Donald Trump has said in an announcement following a recent visit that he’s keen to narrow the US trade deficit with China. He’s also criticised the Chinese governemet for its market barriers and trade surpluses. However, the American Chamber of Commerce has voiced its concerns that Trump may be putting too much emphasis on foreign trade, while ignoring domestic issues like healthcare, education and social security.
China has confirmed it will start to reduce its tariffs on imports of vehicles, although no details have been given and how it will affect imports in still unclear as the majority of vehicles sold in China by global companies are also made within the country. It’s also been announced that the government will increase its limit on foreign ownership of securities, fund management and futures companies from 49% to 51% in three years.