China lifts tariffs on 16 US products

AFP, BEIJING

Thu, Sep 12, 2019 - Page 10

China yesterday announced that it would exempt 16 categories of products from US tariffs, ahead of a fresh round of trade talks next month.

Beijing and Washington have been embroiled in a year-long trade dispute that has seen the two sides slap punitive tariffs on hundreds of billions of US dollars in two-way trade.

The exemptions are to become effective on Tuesday next week and be valid for one year, according to China’s Customs Tariff Commission of the State Council, which released two lists that include seafood products and anti-cancer drugs.

The lists mark the first time Beijing has announced products to be excluded from tariffs.

Other product categories that are to become exempt include alfalfa pellets, fish feed, medical linear accelerators and mold release agents.

The lists do not include big-ticket items such as soybeans and pork, but in the statement, the commission said it was also considering further exemptions.

Trade negotiators have said they are to meet in Washington early next month, raising hopes for an easing of tensions between the world’s two biggest economies.

Both sides imposed fresh tit-for-tat tariffs on Sept. 1.

In a sign of the pressure being felt by the Chinese economy, the People’s Bank of China on Friday last week said that it would cut the amount of cash lenders must keep in reserve, allowing an estimated US$126 billion in additional loans to businesses.

China’s economic growth came in at 6.2 percent in the second quarter, the lowest rate in nearly three decades.

Beijing on Tuesday removed the limits on foreign institutions wanting to invest in its equity and bond markets, as it seeks to attract overseas investment amid a slowing economy and the trade dispute with the US.

Foreign individuals are barred from investing directly in China’s financial markets, but it allows certain institutions to buy shares under the so-called Qualified Foreign Institutional Investor (QFII) scheme.

China’s State Administration of Foreign Exchange said that it had removed the overall ceiling of US$300 billion on total asset purchases under the scheme, offering unfettered access to the world’s second-largest capital market.

A cap on a yuan-denominated sister scheme — the Renminbi Qualified Foreign Institutional Investor (RQFII) program, which allows overseas institutions to invest in Chinese securities using the offshore yuan — was also removed on Tuesday.

“Foreign institutional investors with the relevant qualifications can remit funds to carry out investment in securities in compliance with regulations, greatly enhancing the convenience for foreign investors participating in the onshore financial market,” the regulator said in a statement.

The regulator said that it was also seeking permission from the government to scrap administrative licenses needed by foreign investors to purchase equities and bonds.

Just over one-third of the US$300 billion QFII investments quota had been used by the end of last month, data showed.

The Chinese regulator said that the RQFII program would be open to all overseas institutional investors that meet certain requirements. Earlier it was only available to investors from certain nations or regions on a pilot basis.