Growing competitors? China’s decrease import tariffs will profit diet imports and home market

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China has introduced provisional tariff rates on 883 imported goods that are already subject to the most-favored nation tariffs that apply to imports from World Trade Organization (WTO) member countries that apply the MFN treatment clause.

The affected goods include fish oil soft gel capsules, Chinese liquorice (甘草), FSMPs, lactoferrin, FSMPs for low birth weight and premature babies.

For example, the provisional tariff for fish oil soft gel capsules is 6% below the MFN tariff, which is 12%.

For premature / low birth infant formula FSMPs, the temporary fish oil tariff has decreased from 15% to 0%.

That of Chinese liquorice and lactoferrin has dropped from 6% to 0% and 10% to 5%, respectively.

On the other hand, China also lowered conventional tariffs on certain goods from APAC countries, including Australia, New Zealand and South Korea.

These countries already enjoy preferential rates through regional trade agreements with China.

The reduced conventional duty rates apply to retail packages of infant formula, where the duty rate for Australia and New Zealand is now 0%.

This also applies to Chinese liquorice, which has also become 0% for Australia, New Zealand and South Korea.

Lowering tariffs for both MFNs and countries that have signed regional trade agreements could lead to more competition for certain products.

“Countries that have already signed free trade agreements with China may not have a stronger competitive advantage than before due to the introduction of the provisional tariff,” said Zhang Zhong Peng, director of the Chinese Chamber of Commerce for Import and Export of Medicines and Health Products (CCCMPHIE), told NutraIngredients-Asia . If you

This can be seen in the case of Chinese liquorice, where the tariff is now 0% for countries that previously signed conventional tariffs with China and WTO countries under the MFN principle.

On the other hand, the provisional tariff for fish oil soft gel capsules – a finished product mainly imported from Australia and New Zealand – has been reduced to 6%.

This means that Australia and New Zealand could face increased competition from other exporters of fish oil softgel capsules.

“Adjusting tariffs will not only affect the food industry, it will target multiple industries and affect many products.

“In recent years, China has cut its tariffs on imported goods. Its national strategy is to expand imports to meet domestic demand,” said Zhang.

Fish oil is one of the most sought-after imports as China has extremely low production locally, China Nutrition and Health Food Association’s secretary general Lu Yan Ni said in a comment.

Similarly, she pointed out that the country is also heavily reliant on imports of lactoferrin. The raw material cost has increased since 2017 and is now around 30,000 RMB (4667 USD) per kg.

Increase in local competitivenessIf you

The promotion of imports will also increase the competitiveness of the local food industry, according to Lu.

“The adjustment of tariff policy also created a more competitive framework and urged local Chinese manufacturers to improve their product quality and technical strengths,” said Lu.

Finally, she added that the reduced import duties would also lower retail prices of certain nutritional products to consumers.

This in turn would weaken Daigou trade, protect the country’s tax revenues, and protect consumer safety.