2024 Import-Export Tariffs in China

Posted by Written by Qian Zhou Reading Time: 4 minutes

The State Council has announced new adjustments to the China import-export tariffs for 2024 to address domestic supply and demand and assist with the high-quality development of the advanced manufacturing industry in the coming year. These adjustments include tariff waivers for key medical goods, tariff reduction on resources in short supply, critical equipment and key parts, and certain agriculture products, and tariff increases on certain commodities based on domestic demands. We explain the latest adjustments to the import and export items and discuss the reasons behind the changes.

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China will adjust import and export tariffs on selected goods in 2024 in a bid to support high-quality development and opening up and accelerate the building of innovation patterns, the Customs Tariff Commission of the State Council (the ‘Commission’) said on Wednesday, December 20, 2023.

According to the Announcement of the Customs Tariff Commission of the State Council on Adjusting the Tariffs in 2024 (the 2024 Tariff Adjustment Plan), the following changes are noteworthy.

Overview of China’s 2024 Tariff Adjustment Plan

  • In 2024, China will impose tariffs on 8,957 tax items.
  • Starting from January 1, 2024, 1,010 items, including certain medical products, key equipment and parts, resources in short supply, and some agriculture products, will be subject to provisional import tariff rates, which are lower than the most favored nation (MFN) tariffs.
  • Starting from January 1, 2024, import tariffs on some commodities will be raised to assist with the development of domestic industry and cope with changes in supply and demand. Examples include ethylene, propylene, and liquid crystal glass substrates below 6 generations.
  • The conventional tariff rates will be applied to imported goods originating from 30 countries or regions, under the 20 free trade agreements and preferential trade arrangements that have been signed and entered into force between China and relevant countries or regions.
  • The preferential tariff rates will continue to be applied to 43 least-developed countries that have established diplomatic relations with China and completed the exchange of documents, to support and help the least-developed countries accelerate their development. The zero tariff treatment for Vanuatu will be ceased.
  • The tariff quota management will continue to be implemented on eight categories of commodities including wheat, and the tax rates will remain unchanged.
  • Export tariffs will be imposed on 107 commodities, including ferrochrome, 68 of which are subjected to provisional export tariff rates.

Below we take a closer look at the changes introduced in the 2024 Tariff Adjustment Plan.

What are the changes and which items will be affected?

China to implement provisional import tariffs on 1,010 commodities

Starting from January 1, 2024, China will impose provisional import tariff rates on 1,010 items, which will be lower than the MFN tariffs. These commodities can be classified into the following categories:

  • To protect people’s health and reduce the economic burden on patients, zero tariffs will be imposed on anti-cancer drugs and drugs for rare diseases, as well as on raw materials for producing these drugs. Specifically, drugs and raw materials that will be subject to zero tariffs next year include anti-cancer drugs used to treat liver malignancies and raw materials for rare diseases used to treat idiopathic pulmonary hypertension. In addition, zero tariffs will be applied to inhaled ipratropium bromide solution, which is widely used in the clinical treatment of childhood asthma.
  • Import tariffs will be lowered on formula food for special medical purposes.
  • To promote the innovative development of the advanced manufacturing sector, import duties on key equipment and components such as gas diffusion layers for fuel cells and biogas-fueled generator sets equipped with ignition piston internal combustion engines will be reduced.
  • Import tariffs will also be reduced on sweet corn, coriander, and burdock seeds.

China to increase import duties on certain commodities

From January 1, 2024, China will raise import duties on some commodities to balance domestic demand and supply as well as upgrade its domestic industries. The changes include:

  • Within the scope of China’s accession to the World Trade Organization commitments, raise import tariffs on ethylene, propylene, and liquid crystal glass substrates below 6 generations.

China to apply conventional tariff rates on products from 30 countries

To promote the high-quality opening of markets, China will apply conventional tariff rates on selected goods originating in 30 countries and regions for 2024 under China’s 20 free trade agreements (FTA), including the RCEP.

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Among them, the China-Nicaragua FTZ will implement the first tax reduction in 2024. After the final tax reduction is completed in the future, more than 95 percent of the tax items of both sides will be subject to zero tariffs.

China to add more tax items

To meet the needs of industrial development and scientific and technological progress, China will adjust its subitems appropriately in 2024, adding tax items such as decorative base paper and high-end steel products.

After this adjustment, the total number of tariff items is 8,957.

How to read the changes?

According to analysts, reducing import tariffs is conducive to encouraging the domestic advanced manufacturing industry to introduce more advanced materials, resources, and equipment.

In particular, the reduction of import tariffs on resources such as lithium chloride, low-arsenic fluorite, and gas diffusion layers for fuel cells will help improve the availability of these key raw materials, thereby boosting the development of related industries. This also reflects the government’s support for clean energy and environmentally friendly technologies, which is conducive to promoting economic development in a more sustainable direction.

Following China’s 2023 Central Economic Work Conference (CEWC), an annual meeting of China’s top leadership to set out the economic agenda for the next year, in 2024, China will continue to expand domestic consumption and attract foreign capital, to boost its economic growth. An optimized tariff system is beneficial to both.

In general, the 2024 tariff adjustments reflect the country’s intention to secure its industrial and supply chains. They also aim to reallocate resources to promote technology innovation, industrial upgrades, and green development, and help boost China’s participation in the restructuring of the global industrial chains and the global free trade network.

The 2024 tariff adjustments could affect companies that import and export taxable goods and services to China. Foreign stakeholders should pay attention to these changes to better tap into China’s growing consumer markets.

 

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China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done so since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.

Dezan Shira & Associates has offices in Vietnam, Indonesia, Singapore, United States, Germany, Italy, India, Dubai (UAE), and Russia, in addition to our trade research facilities along the Belt & Road Initiative. We also have partner firms assisting foreign investors in The Philippines, Malaysia, Thailand, Bangladesh.