Sat, Nov 25, 2017 page10

• China cuts some consumer goods tariffs

  IMBALANCE: The US, Europe and other trading partners have been pressuring Beijing for better access, but it is unclear how the small range of tariffs might affect China’s trade balance

  • AP, BEIJING
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  China on Friday announced tariff cuts on consumer goods — including avocados, mineral water and baby carriages — in a new effort to spur economic growth driven by domestic consumption and reduce reliance on trade and investment.

  Beijing faces pressure from the US, Europe and other trading partners for better access to its growing market. However, the range of 187 products affected by the latest cuts was relatively small, and it was unclear how China’s trade balance might be affected.

  Chinese leaders are in the midst of a marathon effort to nurture self-sustaining economic growth based on consumer spending instead of trade and investment. Foreign products often are seen as higher quality, safer or cheaper, which has fueled a spending boom by Chinese tourists on basic goods including shoes, cosmetics and infant formula.

  The latest changes are meant to “enrich domestic consumption choices,” a Chinese Ministry of Finance statement said.

  The changes take effect on Friday next week and will reduce import duties on some products by up to two-thirds.

  Beijing announced a similar tariff cut in 2015 for imported clothes, shoes and other items.

  Encouraging consumers to buy foreign goods from Chinese retailers instead of while traveling abroad can also help generate jobs, said economist Lu Zhengwei (魯政 委) of Industrial Bank (興業銀行) in Shanghai.

  “We know that consumer products are not products of high value and we cannot depend on them to achieve a fundamental turnaround for China’s trade imbalance,” Lu said. “But step by step, it might work if we keep doing things that are mutually beneficial to both sides and good to the markets.”

  China reported a US$510 billion global trade surplus last year, although total trade contracted in a sign of weak foreign and domestic demand.

  Beijing promised on Nov. 10 to gradually reduce tariffs on auto imports, although it gave no details.

  It was unclear how that might affect imports because most of the vehicles sold in China by global automakers are made in China.

  The announcement followed a visit by US President Donald Trump to Beijing during which the two sides signed a multibillion-dollar series of contracts in a tradition aimed at blunting criticism of Beijing’s trade surpluses and market barriers.

  Also on Nov. 10, the Chinese government announced that it would lift its limit on foreign ownership of securities, fund management and futures companies — from a minority stake of 49 percent to a majority stake of 51 percent — and end restrictions after three years.

  A similar change would be made for life insurance companies, with those restrictions ending in five years, the government said.

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