China Cuts Import Tariffs for 730 Commodities on January 1

An Expert's View about Energy in China

Posted on: 20 Jan 2012

On January 1, 2012, China will adopt temporary duties on a total of 730 commodities, including agricultural machinery, fertilizers, animal feed, infant formula, and frozen seafood.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Voluntary Public - Date: 12/22/2011 GAIN Report Number: 11066 China - Peoples Republic of Post: Beijing China Cuts Import Tariffs for 730 Commodities on January 1 Report Categories: Agricultural Situation Approved By: Laura Scandurra Prepared By: Wu Bugang Report Highlights: On January 1, 2012, China will adopt temporary duties on a total of 730 commodities, including agricultural machinery, fertilizers, animal feed, infant formula, and frozen seafood. According to the Ministry of Finance, the move is largely aimed at boosting imports and reducing China’s high inflation rate. General Information: On December 15, 2011, the Ministry of Finance announced on its web site that the Chinese Government will temporarily adopt lower import tariffs for a total of 730 commodities as of January 1, 2012. Once this measure is implemented, the average tariff will be 4.4 percent, which is 50 percent lower than the most-favored-nation (MFN) rate. According to the Ministry announcement, the purpose of this move is to increase imports to meet demand and reduce China’s inflation rate. Local media report that lower tariffs on energy and natural resources, as well as inputs such as fertilizer, will have a cascading effect helping to reduce production costs for domestic industries that rely heavily on the world market for inputs, and eventually cooling down the high inflation rate. Local newspapers report that boosting imports has been upgraded to a national strategic policy, although there are reportedly disagreements between different ministries and state departments on specific measures. The 730 commodities fall into five categories: 1) energy and resource products, including coal, coke, petroleum products, marble, granite, natural rubber, rare earth, copper, aluminum, and nickel; 2) key equipment and parts for emerging strategic industries such as high-tech equipment manufacturing, new generation of information technology, and automobiles using new energy sources; 3) agricultural production materials, including high- powered tractors, large harvest machinery, dairy processing equipment, ingredients for agriculture chemicals, fertilizer, and animal feed; 4) products for daily use, including frozen seafood, special infant formula, infant food, preparations for the care of skin, preparations for hair-dressing, table ware and chicken ware; and, 5) public health and sanitation products, including vaccine, serum, artificial cochlear, and X-ray film. The tariff reductions should facilitate imports of some but not all agricultural products from the United States. For example, frozen plaice, for which the United States is the top supplier ($203 million in January-November, 2011), is covered by the tariff reduction list, but frozen pacific salmon, the top US seafood export to China ($241 million in January-November, 2011), is not included. Other agricultural exports covered by the tariff reduction, for which the U.S. is the top supplier, include whey and modified whey ($159 million in January-November, 2011), food preparations (infant formula) ($128 million in January-November, 2011), and feed preparations ($36 million in January-November, 2011). Imports of pistachios, for which the United States is also the major supplier, may not be affected as China adopted a temporary tariff of five percent on pistachios in 2008 and has not changed the rate since then. The Ministry of Finance did not indicate how long the temporary duties will stay in place. The reduced tariffs, however, will apply to all trading partners, unless they have entered a bilateral trade agreement with China, which may provide a more favorable tariff rate. The attached table covers agricultural commodities under this arrangement. A complete list of commodities can be found at the Ministry of Finance web site at http://gss.mof.gov.cn/zhengwuxinxi/zhengcefabu/201112/P020111215536421856477.pdf Appendix: Temporary Import Tariff Table (agricultural commodities) Temporary Import Tariff Table (agricultural commodities) HS Code Commodity 2012 2012 Temporary MFN Tariff (%) Tariff (%) 01061211 Whale, dolphins and porpoises for pure-bred breeding; 10 0 manatees and dugongs for pure-bred breeding 01064190 Oophagous trichogrammae 10 0 01064990 Predatory mite 10 0 03033110 Frozen Greenland halibut 10 5 03033200 Frozen plaice, excluding livers and roes 12 2 03035100 Frozen herrings, excluding livers and roes 10 2 03036300 Frozen cod, excluding livers and roes 10 2 04041000 Whey and modified whey 6 2 05119111 Fertilized fish eggs 12 0 08024190 Fresh or dried in-shell chestnuts 25 20 08024290 Fresh or dried shelled chestnuts 25 20 08025100 Fresh or dried in-shell pistachios 10 5 08025200 Fresh or dried shelled pistachios 10 5 08029020 Fresh or dried gingko nuts 25 20 12119036 Liquorice roots 6 0 12122190 Other edible seaweeds and algae 15 2 12122900 Other seaweeds and algae 15 2 13021200 Saps and extracts of liquorice 6 0 13021990 Matrine 20 3 15021000 Fats of bovine animals 8 4 15029000 Other fats of bovine animals 8 4 15119020 Palm stearin (cmelting point 50°C-56°C) 8 2 15200000 Glycerol, crude; glycerol waters and glycerol lyes 20 8 18010000 Cocoa beans, whole or broken, raw or roasted 8 2 19011000 Preparations for infant use, put up for retail sale 15 5 19019000 Malt extract and food preparations of flour, groats, meal, 10 5 starch or malt extract not elsewhere specified or included 21069090 Lactoprotein partially hydrolyzed formula, lactoprotein 20 10 deeply hydrolyzed formula, amino acid formulated special infant milk powder 22072000 Denatured ethyl alcohol or other spirits of any alcoholic 30 5 strength 23099090 Other preparations used in animal feeding 6.5 4 24039100 Reconstituted tobacco 57 40 31031010 Triple superphosphates 4 1 31031090 Other superphosphates 4 1 31039000 Other mineral or chemical fertilizers, phosphatic 4 1 31042090 Other patossium chloride 3 1 31043000 Potassium sulphate 3 1 31049010 Carnallite, sylvite and other crude natural potassium salts 3 1 31049090 Other mineral or chemical fertilizers, potassic 3 1 31051000 Goods of Chapter 31 in tablets or similar forms or in 4 1 packages of a gross weight not exceeding 10 kg 31054000 Ammonium dihydrogenorthophosphate and mixtures 4 1 thereof with diammonium hydrogenorthophosphate 31055100 Fertilizers containing nitrates and phosphates 4 1 31055900 Other mineral or chemical fertilizers containing the two 4 1 fertilizing elements nitrogen and phosphorus 31059000 Other fertilizers 4 1 35030010 Gelatin 12 5 35051000 Dextrins and other modified starches 12 6 40011000 Natural rubber latex 20 10% or RMB720/ton, whichever is lower 40012100 Smoked sheets 20 10% or RMB720/ton, whichever is lower 40012200 Technically specified natural rubber (TSNR) 20 10% or RMB720/ton, whichever is lower 41041111 Hides and skins of bovine animals, in the wet-blue state, 7 3 full grains, unsplit or grain splits 41041911 Other hides and skins of bovine animals, in the wet-blue 6 3 state 41041920 Other hides and skins of equine animals, in the wet state 7 5 41044100 Other hides and skins of bovine animals, in the dry state 5 3 (crust) 41051010 Tanned or crust skins of sheep or lambs, in the wet-blue 14 10 state 41062100 Tanned or crust skins of goats, in the wet-blue state 14 10 41063110 Tanned or crust skins of swine animals, in the wet-blue 14 10 state 41071210 Whole hides and skins of bovine animals, further 8 6 prepared after tanning or crusting, grain splits 52101100 Plain, unbleached cloth of cotton, mixed with other man- 12 6 made fibers (light weight) 52101910 3-thread or 4-threath twill, unbleached cloth of cotton, 12 6 mixed with other man-made fibers (light weight) 52101990 Other unbleached cloth of cotton, mixed with other man- 12 6 made fibers (light weight) 52111100 Plain, unbleached cloth of cotton, mixed with other man- 12 6 made fibers (heavy weight) 52111200 3-thread or 4-threath twill, unbleached cloth of cotton, 12 6 mixed with other man-made fibers (heavy weight) 52111900 Other unbleached cloth of cotton, mixed with other man- 12 6 made fibers (heavy weight) 52121100 Other unbleached light fabrics 12 6 52122100 Other unbleached heavy fabrics 12 6 53012100 Flax, broken or scotched 12 6 53013000 Flax tow and waste 12 6 53062000 Flax yarn, multiple (folded) or cabled 12 6
Posted: 20 January 2012

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