News 1+1丨What are the differences in this round of tariff adjustments?
The Tariff Commission of the State Council issued a notice on the 15th that starting next year, my country will substantially adjust its tariffs, involving temporary tax rates, most-favored-nation tax rates, and agreed tax rates.
This notice appeared on the official website of the Customs Tariff Commission of the State Council. Although there are not many words, it may have a considerable impact on our lives.
"News 1+1" connects with Cui Fan, a professor at the University of International Business and Economics. What adjustments are involved in the new tariff plan?
What impact will these adjustments have on Chinese consumers and enterprises?
What are the differences in this round of tariff adjustments?
One article takes you to understand.
Starting from January 1, 2022, my country will impose a provisional import tariff rate lower than the most-favored-nation tax rate on 954 items, including some medical products such as the new anti-cancer drug radium chloride injection, baby clothing, dishwashers, ski equipment, etc. Consumer goods... will also implement tariff reductions on the nine effective members of the Regional Comprehensive Economic Partnership Agreement (RCEP), and Japan will implement tariff reduction arrangements for the first time.
How is the new tariff adjustment plan different from previous years?
Professor Cui Fan of the University of International Business and Economics: First of all, there are more types of tax cuts through the provisional tax rate than before. This year, a total of 954 tax numbers have been reduced.
For example, the provisional tax rate was reduced by more than 880 last year, and the previous year was reduced by more than 850. Therefore, the scope of tax reduction through the provisional tax rate this year is more than before.
Another big difference is that the plan released this year has a reduction in the RCEP treaty tax rate for the tax reduction starting next year.
RCEP will come into effect on January 1 next year. There will be a lot of products that will be reduced to zero tariffs or reduced taxes. This is very different from the past.
In fact, there will be another free trade area agreement next year, the free trade area agreements of China and Cambodia, and the implementation of the two new free trade area agreements will bring tax reductions.
Are tariff reductions between my country and other RCEP member countries mutual?
How is it different from the previous bilateral reciprocity?
The Regional Comprehensive Economic Partnership Agreement (RCEP) is the world's largest free trade zone. Since its signing on November 15, 2020, China has worked with other members to actively promote the agreement to enter into force as scheduled.
RCEP will officially take effect on January 1 next year, and my country will also implement tax reductions on nine effective members including Japan, Australia, New Zealand, Brunei, Cambodia, Laos, Singapore, Thailand, and Vietnam.
Professor Cui Fan of University of International Business and Economics: Tariffs are all mutually reduced.
We have signed free trade agreements with countries other than Japan in the past, and we have also had bilateral and reciprocal tax reduction arrangements. However, the tax items of this RCEP tax reduction are different from those of the previous bilateral free trade agreements. The difference is that there are some products that have not been included in the tax reduction catalog before, and this time the tariff rate will drop.
For example, there will be new tax reduction arrangements for motorcycles exported from China to ASEAN and antlers exported from China to South Korea. Therefore, there will also be new market opportunities for producers in these industries.
What impact will the coming RCEP have on my country?
Professor Cui Fan, University of International Business and Economics: RCEP is different from all the free trade agreements that China has signed in the past. In the past, it was basically a bilateral free trade agreement. This time, within 15 countries, it signed the world’s largest free trade area agreement. The integration of the entire East Asian economy and the integration and optimization of the entire Asian value chain will be of great benefit.
In this region, the RCEP economy accounts for about one-third of the overall world economy, and here, China accounts for about 58% of the RCEP economy, making it the largest economy.
Therefore, to a large extent, optimizing the Asian value chain means optimizing the regional value chain centered on China to a certain extent. For us, improving our competitiveness in the region, especially in the world, will be great. benefit.
RCEP takes effect. my country will implement tariff reduction arrangements for Japan for the first time. Will it have an impact on my country's industry?
Professor Cui Fan, University of International Business and Economics: First of all, on the one hand, my country wants to reduce tariffs to Japan. In the first year, 24.9% of products will be reduced to zero tariffs. At the same time, Japan also reduces taxes to China. In the first year, Japan reduces tariffs to China. The tax coverage will reach 55%, which is a balance of interests.
On the other hand, my country’s tax reduction is a long-term arrangement. Many of them are reduced within 10 years, and some even in 20 years. The impact is gradually released.
Next year, my country will implement preferential tax rates for 44 least developed countries, and the proportion of products with zero tariffs will reach 98%. Will my country's interests be harmed?
Professor Cui Fan of the University of International Business and Economics: The unilateral preferential treatment given to these least developed countries is in line with the continuous improvement of our level of economic development and the continuous improvement of our strength, which reflects that China is more responsible for being a great power in the global economy. .
Moreover, the industrial structure of these least developed countries is not particularly competitive with my country's industrial structure. If there are relatively strong competitive products, 2% and 3% are also outside the scope of preferential tax.
So for our country, the impact on our industry is not great, but the least developed countries are better able to export products and can share the benefits of the growing Chinese market.
The import tax rate for pork has increased?
what's the situation?
Professor Cui Fan of University of International Business and Economics: The tax rate of pork last year and this year is included in the provisional tax rate, which is lower than the most-favored-nation tax rate, which is the tax rate China promised to the WTO. The most-favored-nation tax rate is 12%, and the provisional tax rate is 8. %, especially at the beginning of last year, there was a shortage of domestic pork, so the provisional tax rate was reduced to import more pork to meet the needs of the people.
But then the domestic supply gradually increased. There was more pork in stock, or even too much supply. In some places, the price of pork was even lower than the cost. In this case, we restored the tax rate of pork to the most-favored nation tax rate, from 8. % And then restore to 12%, which has certain benefits for balancing supply and demand.
Some daily consumer goods are included in the “list” of tariff cuts next year. Will it stimulate the domestic market?
Professor Cui Fan of the University of International Business and Economics: I think there is actually a huge demand for these tax-cut products. Whether it is salmon or cod from abroad, there is still relatively large demand in the domestic market.
Tax reductions for baby clothes will also have greater benefits in reducing the cost of raising children.
We are now holding the CIIE every year, and importing more high-quality products in need through tax cuts will have certain benefits in boosting and stimulating consumption as a whole.
Because from the perspective of the world’s economic development, the momentum of the world’s economic recovery next year may be eased and declined, so domestic demand may also be sluggish at present, and tax cuts may be used to boost consumption. Generally speaking, it is good for the macro economy.
At the 20th anniversary of my country's accession to the WTO, does China's overall tariff level match the current economic development?
Will the tax rate fall again in the future?
Professor Cui Fan of the University of International Business and Economics: my country’s tariff rate of 15.3% for China’s accession to the WTO in 2001 has been reduced to 9.8% in 2010, and its commitment to the WTO has been fulfilled.
After that, it dropped from 9.8% to 7.4%. This is my country's voluntary tax cut. After this part of the reduction is completed, it will basically be in line with my country's current level of economic development.
At the same time, through the tariff reduction of the free trade agreement, about 50% of the products can be included in the free trade zero tariff. In fact, the overall tariff level in my country continues to decline.