Page 9 - THE SOUTH CHINA BUSINESS JOURNAL
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cent reduction of the applicable consumption household appliances accounts for a low
tax and import VAT. This will now also apply to proportion of sales in the country, and means
these 20 commodities stated above. that the relaxations reinstated by this preferential
policy application will have a limited impact on
Aside from this, the notice will affect import the overall market of the household appliances
duty on these 20 categories of products, which industry in China.
include any import duty, import VAT, and import
consumption tax exemptions and reductions that Nevertheless, reversing this exclusion of
may be applicable to these items. commodities from preferential import tax policies
has been long overdue, and represents a small
Implications for the affected industries but much-needed relief amid an increasingly
On paper, China’s imports of electrical uncertain trade climate.
commodities – including sound recorders
reproducers, television image and source Already, the coronavirus outbreak has caused
recorders and reproducers, and parts of much volatility in commodity prices – with the
accessories of such articles, comprised a sizable prolonged shutdowns affecting both the demand
24 percent (US$521 billion or RMB 3.6 trillion) of and supply of commodities.
all Chinese imports in 2018.
The pandemic, coupled with protracted trade
However, in reality, most of what is imported tensions and shifting supply chains, has
are electronic parts and components, which are prompted new measures to shore up business
in turn used to manufacture larger electronic and consumer confidence. Reinstating the import
appliances for export – meaning the actual tax incentives on these 20 commodities shows
import of large electronic appliances, such that China wants to reinvigorate its consumer
as the commodities listed in this most recent spending and improve market outlook, while
announcement, is comparatively low. securing its own reserve demands.
This may have added significance for the food
This is clearly shown when taking four electronic products on the commodity list, which received
appliances as examples. undue attention last week as President Xi Jinping
homed in on the issue of food security.
According to data released by the National Xi urged the population to cut down on their
Household Appliance Industry Information food waste, especially amid the fallout of the
Center, in 2019, the market size of televisions, COVID-19 pandemic, and ‘maintain a sense of
air conditioning, refrigerators, and washing crisis regarding food security.’
machines in China was RMB 128.2 billion
(US$18.6 billion), RMB 191.2 billion (US$27.7 He stressed on the fact that China needs
billion), RMB 95.7 billion (US$13.8 billion) and to enhance its legislation and supervision
RMB 70.5 billion (US$10.2 billion), respectively. surrounding this issue and take effective
For the same period, import amounts for each measures and establish a long-term mechanism
of these four kinds of household appliances to tackle food waste head on.
comprised of RMB 10.6 million (US$1.5 million),
RMB 51.3 million (US$7.43 million), RMB 8.2 According to data released by China’s
million (US$1.2 million), and RMB 4.4 million Administration of Customs, in July 2020, China’s
(US$640,000), respectively. total volume of imports was valued at RMB 1.242
trillion (US$180 billion) – a 1.6 percent increase
This roughly accounted for 0.8 percent, 2.7 from the same period last year.
percent, 0.9 percent, and 0.6 percent of national Though China’s trade volumes show promising
retail sales, respectively. signs of gradual recovery, it is clear the
government is still being cautious – more tax
When looking at these statistics together, it reduction and exemption policies are likely to
becomes evident that the sale of imported follow, in order to spur on more business and
trade activity in the country.
SOUTH CHINA BUSINESS JOURNAL 6
tax and import VAT. This will now also apply to proportion of sales in the country, and means
these 20 commodities stated above. that the relaxations reinstated by this preferential
policy application will have a limited impact on
Aside from this, the notice will affect import the overall market of the household appliances
duty on these 20 categories of products, which industry in China.
include any import duty, import VAT, and import
consumption tax exemptions and reductions that Nevertheless, reversing this exclusion of
may be applicable to these items. commodities from preferential import tax policies
has been long overdue, and represents a small
Implications for the affected industries but much-needed relief amid an increasingly
On paper, China’s imports of electrical uncertain trade climate.
commodities – including sound recorders
reproducers, television image and source Already, the coronavirus outbreak has caused
recorders and reproducers, and parts of much volatility in commodity prices – with the
accessories of such articles, comprised a sizable prolonged shutdowns affecting both the demand
24 percent (US$521 billion or RMB 3.6 trillion) of and supply of commodities.
all Chinese imports in 2018.
The pandemic, coupled with protracted trade
However, in reality, most of what is imported tensions and shifting supply chains, has
are electronic parts and components, which are prompted new measures to shore up business
in turn used to manufacture larger electronic and consumer confidence. Reinstating the import
appliances for export – meaning the actual tax incentives on these 20 commodities shows
import of large electronic appliances, such that China wants to reinvigorate its consumer
as the commodities listed in this most recent spending and improve market outlook, while
announcement, is comparatively low. securing its own reserve demands.
This may have added significance for the food
This is clearly shown when taking four electronic products on the commodity list, which received
appliances as examples. undue attention last week as President Xi Jinping
homed in on the issue of food security.
According to data released by the National Xi urged the population to cut down on their
Household Appliance Industry Information food waste, especially amid the fallout of the
Center, in 2019, the market size of televisions, COVID-19 pandemic, and ‘maintain a sense of
air conditioning, refrigerators, and washing crisis regarding food security.’
machines in China was RMB 128.2 billion
(US$18.6 billion), RMB 191.2 billion (US$27.7 He stressed on the fact that China needs
billion), RMB 95.7 billion (US$13.8 billion) and to enhance its legislation and supervision
RMB 70.5 billion (US$10.2 billion), respectively. surrounding this issue and take effective
For the same period, import amounts for each measures and establish a long-term mechanism
of these four kinds of household appliances to tackle food waste head on.
comprised of RMB 10.6 million (US$1.5 million),
RMB 51.3 million (US$7.43 million), RMB 8.2 According to data released by China’s
million (US$1.2 million), and RMB 4.4 million Administration of Customs, in July 2020, China’s
(US$640,000), respectively. total volume of imports was valued at RMB 1.242
trillion (US$180 billion) – a 1.6 percent increase
This roughly accounted for 0.8 percent, 2.7 from the same period last year.
percent, 0.9 percent, and 0.6 percent of national Though China’s trade volumes show promising
retail sales, respectively. signs of gradual recovery, it is clear the
government is still being cautious – more tax
When looking at these statistics together, it reduction and exemption policies are likely to
becomes evident that the sale of imported follow, in order to spur on more business and
trade activity in the country.
SOUTH CHINA BUSINESS JOURNAL 6
