China announced on Monday it will cut import taxes on clothing, cosmetics and some other goods by half in a new tactic to spur consumer spending and economic growth.
Beijing is in the midst of a marathon effort to reduce reliance on trade and investment to drive economic growth by nurturing domestic consumption. Tariff cuts due to take effect June 1 will be "conducive to a reasonable expansion of imports," said a Finance Ministry statement. "Expanding domestic consumer demand is an important measure for steady growth and structural adjustment." The cuts apply to clothing, shoes, skin care products, baby food and supplies and kitchen utensils.
Growth in retail sales declined to 10 percent in April, down from March's 10.2 percent and below expectations of 10.4 percent. Imports plunged 16.2 percent compared with a year earlier in a sign of weak consumer demand.
From 1 June tariffs for Western-style clothing will be reduced to 7-10 percent from 14-23 percent.
Taxes on ankle-high boots and sports shoes will be halved to 12%. Import tariffs on skincare products will fall from 5 percent to 2 percent, according to BBC. However, its not just import taxes that drive up the prices of imported consumer goods in China. VAT and other taxes also play a part. Analysts say consumers in China pay around 20 percent more for luxury goods than those in Europe.
