Cutting tariffs on a range of imported consumer goods will help meet Chinese demand for high-end products, increase the supply of Chinese consumer goods, and attract high-quality foreign investment, argues Qiao Ruiqing, a columnist for the Economic Daily.
China will reduce the average tariff on a range of goods to 7.7 percent from 17.3 percent, affecting imported foods including health supplements, pharmaceuticals, clothes and recreational goods.
The cut follows efforts to boost domestic consumption of luxury consumer goods, Qiao said, and reducing tariffs will allow Chinese consumers to purchase more expensive foreign products. This will introduce more international brands into the Chinese market, benefiting domestic consumers in the long term by stimulating competition to improve the quality of Chinese-made products.
Tariff cuts will also reduce China's account surplus, Qiao said. China's abundant foreign exchange reserves have meant China's central bank has been able to increase the money flow passively without implementing monetary policy. China is no longer pursuing foreign exchange trading, and is instead focusing on how to improve the quality of its foreign exchange reserves, Qiao said.