China is to reduce import taxes by more than 50 per cent on some consumer goods, including apparel, in a bid to encourage an increase in domestic spending, according to media reports.
The Chinese finance ministry has said that it will lower import taxes on products such as Western-style suits and fur garments, boots, and sports shoes from June 1
The move is intended to boost imports, promote domestic consumption, and satisfy strong consumer demand for certain imported products.
Suit and fur clothing import duty will be reduced from 14-23 per cent to 7-10 per cent, and short boots and sports shoes from 22-24 per cent down to 12 per cent
The tax cuts come as China’s government looks for ways to boost spending within its borders. The country’s retail sales growth has been sliding and its economy grew 7 per cent year-on-year in the first quarter, its worst performance in six years.
The slowdown has swayed policy makers who had once worried that a duty reduction might hurt tax revenue, analysts say.
According to market consultancy Bain & Co, Chinese consumers spent $61.3 billion on luxury products last year, China Daily wrote. Around 55 per cent of the purchases were made in overseas markets, and another 15 per cent were completed by daigou. Less than a third of the luxury purchases were made through Chinese mainland brick-and-mortar shops or online platforms.
