China to lower tariffs on imported cars

A total of 440 imported Jeep Wrangler off-road vehicles by US automaker Chrysler with a combined value of 200 million yuan arrive at a dock in Guangzhou, a city in southern China, Dec. 5, 2017. (Photo by Cai Minjie from China News Service)

China will expand its market access by lowering tariffs on imported vehicles and some consumer goods, the Minister of Commerce Zhong Shan told a press conference at the ongoing annual sessions of China’s national legislature and top political advisory body.

China is home to the world’s second largest consumer market, and consumption has ,for the fourth consecutive year, become the largest driver of economic growth, Zhong said.

About 400 million of its 1.4 billion population are middle-income earners, the minister noted, adding that continuous social and economic development, rising incomes of the residents and improving livelihoods mean there is huge consumption potential in China.

As a result of China’s economic progress and supporting policy in recent years, China maintained a rapid growth in its vehicle sales, with the number topping the world since 2009. At the same time, car ownership kept rising. In 2016, over 20 million new vehicles were sold.

The volum of imported vehicles has been growing as well. In the first 11 months of 2017, a total of 1.1 million cars were imported, and the number for the whole year is estimated at 1.2 million, according to the import and export commission of the China Automobile Dealers Association.

Analysts regard the lower tariff on imported cars as good news for Chinese market, as it will offer wider choices for consumers by stimulating domestic manufacturers to upgrade the industry. The latest tax reduction on imported cars to 25 percent was announced on July 1, 2006.

Industry insiders believe the tax reduction will not have a big impact on domestic market in the short term, because most of the best-selling foreign models are already produced in China. In future, the imported luxury cars will benefit most from the policy, according to the Beijing Business Today.