China Lowers Import Duty on Steel Products

China is set to lower its import tariffs from the current rate of 8.4% to 11.5% with effect from November 1, as per the latest announcement made by Ministry of Finance.

Along with steel, China will cut tariffs on certain industrial products including textiles, ceramics, glass, machinery and other metal products.

The general tariff level of these goods will go down to 7.8% from 10.5% and at the same time, China's general tariff level is now brought down to 7.5% from 9.8%.

This tax reduction on 1,585 items, which accounts for 19% of China's total tariff items, is to serve China's industrial upgrading, lower corporate costs and fulfill the public's diversified consumption demands, the statement by the State Council said on last Sunday.

This is the fourth time that China has lowered tariffs on imported goods this year since President Xi Jinping made such pledges during the Boao Forum for Asia in Apr’18.
The previous three cuts were a zero tariff policy on medicine from May 1, a slash on automobiles and auto parts, and a tariff cut on 1,449 daily necessities from July 1.

With these tax cuts made, China's general tariff levels are now lower than that of most developing economies and is only slightly higher than the European Union.

China is a net exporter of steel which means its steel exports are higher than imports. In 2017, the country imported 13.7 MnT of steel, a 2% increase from 13.4 MnT in 2016. The highest imports were made from Japan at 5.7 MnT (41%) followed by South Korea at 4.2 MnT (30%) and Taiwan at 1.5 MnT (11%).

Flat products account for the largest share of China’s steel imports. In 2017, China imported 10.3 MnT of flat products — 75% of total steel imports. Long products accounted for 12%, or 1.6 MnT, of China’s imports, followed by stainless products (9% or 1.2 MnT), pipe and tube (3% or 351 thousand metric tons), and semi-finished steel (2% or 283 thousand metric tons).

In 2018 (during Jan to Aug’18), China imported about 8.59 MnT of steel, out of which flat products imports were 7.61 MnT whereas long imports were 0.98 MnT.