China has announced it will open up its automobile market by significantly slashing import tariffs on vehicles from July 1st. The announcement by China's State Council on Tuesday will be greeted with enthusiasm by car manufacturers eager to sell their products on an ever-expanding Chinese market.
For car imports, the 25-percent tariff levied on 135 items and the 20-percent duty on four items will both be slashed to 15 percent.
Meanwhile, import tariffs for 79 items of auto parts will be reduced to 6 percent from the current levels of 8 percent, 10 percent, 15 percent, 20 percent, and 25 percent.
The move is one of the country's latest measures to further expand the reform and opening-up process.
An expert said the policy will benefit the employment and production of auto exporters in the world once it is put into effect, as the growing need for imported vehicles from the giant market of China will directly expand the auto output of the exporting countries.
"From the global perspective, the tariff reduction will play an active role in promoting the global economic growth and employment, and will make direct contribution to the production and employment growth of car exporting countries," said Liu Shangxi, director of the Chinese Academy of Fiscal Sciences.
Meanwhile, the domestic auto producers in China will be to some extent forced to improve the quality and efficiency of their products, and to keep innovating and upgrading, in order to better meet the need of the customers in the competitive market.
"With this large-scale tariff reduction, the market competition for Chinese auto producers will be further intensified. And a catfish effect will thus be created under such circumstances by reducing the import tariffs on vehicles, as the policy will largely accelerate the transformation and upgrading of domestic Chinese auto producers, and promote the supply-side structural reform of the auto industry," said Liu.