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According to an announce- ment released by the Customs Tariff Commission of the State Council on May 21, it will cut import tariffs on some daily consumer products by over 50% on average, starting from June 1, as part of efforts to meet consumer demand and boost domestic consumption.
The temporary adjustment came after the State Council decided to reduce import tariffs on consumer products, most of which are low-end manufacturing products, and launch pilot projects on April 28.
Lower tariffs on products closely related to people’s livelihoods have been much attention. Import tariff rates imposed on apparels, such as suits and fur garments, will be lowered from 14-23%to 7-10%, while those on ankle boots and sneakers will be reduced from 22-24% to 12%.
Besides, tariff rates imposed on paper diapers will be lowered from 7.5% to 2%, while those on skin care products will be cut down to 2% from 5%.The new rates will take effect on Jan 1.
The government aims to change the economic structure and further get market economy status by lowering import tariff rates, putting direct pressure on low-priced traditional manufacturing products.
As a result, times for Chinese lowend manufacturers get significantly tougher.
China is a global hub for manufacturing, and the world’s largest manufacturing power as well as the largest imports of goods in the world. However, with labor costs soaring and foreign firms withdrawing from the country, the era of low-end manufacturing in China is drawing to a close.
Over the past decade, many foreign manufacturing companies withdrew from China in succession. Mr. Zhao, an employee in a U.S.-funded company in China, was laid off not long ago. Later, he found a new job in another foreignfunded company, but was informed a week ago that his position was canceled as part of a cost-reduction program.
There are many same stories happening in the manufacturing industry. Some employees complained that a number of foreign manufacturing companies lay off workers in China and relocated production lines back to their countries.
With rising labor costs eroding the country’s low-cost manufacturing advantage, some low-end manufacturers have already started moving to countries like Vietnam and Cambodia where labor cost are much lower than China. Besides, due to the narrowing gap of labor costs between the China and other developed countries, there is a quiet trend for foreign companies bringing some manufacturing back to their local market.
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