USCBC Sees Real Opportunities in China's Decision to Encourage Imports
China's new policy on encouraging imports is "unique in that it offers concrete policy recommendations that hold the potential to make exporting products to China easier and more cost effective," said John Lenhart, manager, business advisory services at the US-China Business Council, in a May 16 report to members in China Market Intelligence. "These new opinions appear to confirm the government's commitment to increase imports and domestic consumption, holding the potential for even greater opportunities going forward for American enterprises selling to China."
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The Chinese Ministry of Commerce has also listed boosting imports as a key priority for 2012, Lenhart said. China is currently the world's second-largest importer after the U.S., he said, and Vice Minister of Commerce Zhong Shan has said he expects China to become the world's largest importing nation by 2015, importing more than $8 trillion worth of goods.
Chinese officials still haven't revealed specific products that will receive tariff reductions, but the opinions mention certain categories of products, such as raw materials used in energy production, key components for equipment related to the strategic emerging industries, high-tech products, and certain important consumer goods, such as meat, dairy products, clothing, or cosmetics, as likely to receive tariff reductions, Lenhart said. Tariff cuts in the agricultural sector have little influence on American exports, because other trade barriers, such as import bans and tariff-rate quotas, already limit the amount of U.S products that can enter the Chinese market, he said.
Chinese officials also hope to increase domestic buyers' access to financing for the purchase of foreign goods, allowing more flexibility for companies in the issuance of shares, private bonds, and short-term financing bonds.
No details were given about changes to foreign exchange controls, which Lenhart said have also been a strong barrier to domestic consumption of imported products. But he said China's State Council did say in article seven that Chinese officials should continue to reform their foreign exchange regime, eliminating unnecessary restrictions and creating service platforms to make it easier for businesses to manage the sometimes difficult to navigate foreign exchange process.
(China will lower import tariffs for some resources and raw materials with provisional tax rates and "appropriately" bring down import tariffs for some goods that are closely linked with people's daily life, according to guidelines posted on the official Chinese government website. It still did not give further details. The State Council announced the decision April 30 (See ITT's Online Archives 12050122.
China had earlier said it would cut tariffs, again without providing details. The move was supported by the World Trade Organization and others. See ITT's Online Archives [Ref.12041138]).
Details of the USCBC report are available in the members section of its website (here)