In 2003 China will adopt a zero tariff policy for 110 import items including fax machines, mobile phones, intercoms, pagers, computer mouse and keyboards, said China's Customs authority. In addition, tariffs on imported automobiles will be cut from 52.5 percent to 43.3 percent. The prices for a number of import goods will be reduced, benefiting Chinese consumers.

Over the past year, China has lowered its tariff average to 12.7 percent, in line with its WTO commitments. In 2002, Beijing city reduced import tariffs on 29 categories of goods such as electronic products, cars and electrical machinery and equipment, and scraped tariffs altogether on 16 categories of goods including electronic products and computer accessories. In 2003 China will further reduce tariffs, and by 2007 the average rate of tariffs will be just 10 percent. Within the next three years, information products will be free of customs duties. From next year the import quotas currently imposed on some products will be lifted. For example, the quota on photographic equipment will go from US$14 million worth to zero.

A salesperson in the Zhongguancun Center for Electronic Products in Beijing revealed that prices for a number of imported IT products have been decreasing since the introduction of tariff exemptions. An imported laptop now costs 15,000 yuan (US$1,812) where as in the past the same product would have cost an additional 5,000 yuan (US$604). Legend and Founder computers, two local brand names, are also cheaper as the cost of imported parts, such as CPUs, have been reduced.

Smuggled cameras are often found in Chinese markets because of strict quota restriction. In 2003, when quotas are removed, a greater variety of photographic goods will enter the Chinese market. Many foreign-brand name cameras such as Nikon and Canon will see lower prices.

2003 will also be a good year for automobile enthusiasts as car tariffs are reduced by a further 9 percent. In 2002, China reduced tariffs on imported car parts and components from 35.7 percent to just 6 percent and tariffs on car engines from 31 percent to 18 percent.

Yet an expert from the Beijing WTO Research Consultation Center predicted that tariff reductions will have little impact on the telecommunications market made up of mobile phones, telephones and pagers, since many foreign brands such as Nokia and Ericsson have already localized production in China, and many China-produced products have been exported overseas. But certainly prices for high-end telecom products will fall. As for Chinese enterprises, zero tariffs will undoubtedly present rigorous challenges. 2003 will be a crucial year for them. They will have to learn how to survive and thrive amongst intense competition with their foreign counterparts.

(China.org.cn December 24, 2002)