China reported that it would soon be cutting the tariff duty on numerous imported items. The items, ranging from cashmere to whisky, have been re-priced to promote spending, and economic growth.
The announcement was made by China’s Finance Ministry, which stated that the tariffs would soon drop from 17.3% to 7.7% on certain products. The drop will apply to over 187 products in a myriad of sectors including pharmaceuticals, health supplements, clothing, and food.
China admitted the move was made in order to encourage consumers to spend more within the country. China’s consumer restrictions meant that more and more consumers were opting to purchase internationally. This in turn meant that funds were flowing out of China.
To combat the issue, the Chinese government decided to go easy with the restrictions on imports, and provide consumers with the foreign experience at home.
The idea, then, was to make the shift toward a more materialistic society. This means that China has finally shown the world that it is willing to open the door to its consumer market.
In the past, China has come under severe criticism from other countries that claim that it indulges in unfair trade practices. Chief among these claimants was U.S. President Donald Trump who has publicly stated that he wants to reduce the U.S.’ deficit with China.
China’s decision means that more people will now be purchasing imported goods on the Chinese market.
The need for this kind of import increased drastically after China’s food industry was plagued with a series of food-safety scandals.
These scandals, thus, frightened consumers into opting for foreign brands over their domestic counterparts.
Commenting on the decision, chief trade economist at HSBC, Doug Lippoldt stated that the cut in import tariffs was a very positive move on the government’s part.
He added that opening its doors to the international market would only benefit China’s economy “in the long run”.