December 16, China is to cut tariffs on 730 imported goods in 2012, in a bid to boost imports and domestic consumption, the Ministry of Finance said in a statement on Thursday.

The tariffs on 730 imported products will be lowered to an average of 4.4%, less than half its most-favoured-nation tariff rate, the ministry said.

The reduced import tariffs take effect on Jan. 1, 2012 and cover resources such as coal, rare-earth, copper, and high-tech equipment and parts, the ministry said in a statement on its website.

Imports for daily consumption, healthcare and cultural promotion are also entitled to the tax cuts.

It also said China will maintain its existing "temporary" tariffs on exports of coal, crude oil, fertilizer and iron alloys.

Lowing tariffs is the most direct way to boost imports as a lower tax rate has a cascading effect; a 5% cut in import tax will reduce final retail prices by as much as 10%, Liu Huan, the vice-president of School of Taxation of the Central University of Finance and Economics, told the Shanghai Securities News.

Liu noted that boosting imports has been upgraded to a national strategic policy, although there are disagreements between different ministries and state departments on specific measures.

“The highly controversial luxury products were not included in the rate cut, but daily consumer goods were covered, which will help to improve people's living standards,” Liu said.