‘A matter of time’ before duty cut on luxury goods
This final article is not directly related to sourcing, but it does offer some insight into a positive trend that is shaping the way the west does business with China.
Here are some of the key parts of the article:
“China has committed itself to doubling imports by 2015 to balance trade.”
Wow! Don’t hear too many governments offer that up to the rest of the world these days. This should make some friends in London and DC.
But here is the rub:
“Industry figures also reveal that Chinese consumers spend four times more on luxury goods abroad than at home, thanks to high import duty and taxes.”
Because the duty rates are so high, Chinese are going to HK and overseas to buy the high end stuff. Beijing is smart, by lowering its duty it will retain those high end shoppers and generate more revenue for the tax man back home.
But here is the most important part for us international business people:
“Since China’s WTO entry in 2001, import tariffs have dropped to 9.8 percent, on average” in accordance with the WTO agreements.
When China joined the WTO they made some big promises about opening their economy and generally making it easier for people like us to do business here. So anytime you see in the news that China is fulfilling its WTO agreements, we should be happy. This is part of the march towards free trade conducted under the rule of law. Amazing when you look back at where China was just 30 years ago.
Hope you enjoyed this video wrap up of the month’s headlines.
What’s that you ask….oh this book….
Wishing you successful China sourcing!