CHINA is to cut tariffs on more than 730 imported goods from next year to boost domestic supply and balance trade, the Ministry of Finance said yesterday.
The new provisional duty rate, averaging 4.4 percent and less than half its most-favoured-nation tariff rate, will apply to six product categories, including energy and natural resources, equipment and parts, and agricultural materials, the ministry said.
The cuts, effective from January 1, are to "make tariff policies more directive, flexible and visionary so as to facilitate the transformation of China's economic structure and growth model," according to the ministry.
Lowered duties on resources such as coal, rare earth, copper, and high-tech equipment and parts are set to boost industrial activity and encourage the development of high-end machinery, information technology, and new energy vehicles, it said.
Imports for daily consumption, health care and cultural promotion are also entitled to the tax cuts to improve people's living standards.
"This move is to encourage imports as part of efforts on balancing trade," said Li Maoyu, an analyst at Changjiang Securities Co.
"China has fulfilled its promises as a member of the World Trade Organization in the past decade, and it's time to make new pledges."
The potential increase in imports after the tax cuts can pare the downside of shrinking external demand, and ensure trade remains a key driver of China's growth, Li said.
The growth rate of the country's exports hit the nine-month low in November, with a total trade surplus of US$138.4 billion for the past 11 months, 18.2 percent lower than a year earlier.
At a ceremony commemorating the 10-year anniversary of China's entry into the WTO, President Hu Jintao said he expected the country's total imports to go beyond US$8 trillion over the next five years, with the aim of striking a balance of trade.
Since it joined the WTO, China has cut its average tariff rate from 15.3 percent to 9.8 percent, and chalked up US$750 billion worth of imports on average each year.
The country is to reinforce its commitment to the free trade and preferential trade agreements it signed with foreign trading partners next year by lowering conventional tariffs and enlarging the scope of items covered by the policies, the finance ministry said.
Hong Kong, Macau, and Taiwan will also benefit from the tariff cuts that will apply to some of their exports to the Chinese mainland.
And 40 least developed countries will continue to enjoying preferential tariffs on exports to China.
However, coal, crude oil, fertilizer, and ferro alloy will remain subject to provisional duties so as to promote sustainable eco-friendly economic growth, the ministry said.
Next year, tariffs will apply to 8,194 items imported to China compared to this year's 7,977.