Hardware products export tariff agreement tax rate margin will increase

Since January 1, 2010, China has further adjusted the import and export tariffs, mainly involving most-favored country tariffs, annual tentative tax rates, agreed tax rates, preferential tax rates, and tariff lines. In the current tax rate adjustment, China began to implement agreements with ASEAN, Chile, Pakistan, New Zealand and other countries. The above countries will also implement the corresponding treaty tax rates for China's commodities in 2010 in accordance with relevant agreements.

Compared with 2009, China's implementation of the agreement in 2010 has a wider range of tax rates and a greater margin of preference. From the January-November export situation, Zhuji has 416 companies in export tax treaty countries, accounting for more than half of the city's export enterprises. For example, as the third largest export market in Zhuji and the fifth largest import market in the ASEAN market, in 2008, Zhuji’s exports to the ASEAN market amounted to 210 million U.S. dollars, and in January-November 2009, the export value reached 140 million U.S. dollars. According to the China-ASEAN Free Trade Area Agreement, the fourth batch of normal goods will be tax-deducted next year. After the tax reduction, China will implement a treaty tax rate of 6800 or so, and the overall average tax rate will be 0.1%. It is 99%.

What are the treaty tax rates to be implemented? It is understood that the imminent implementation of the treaty tax rates in 2010 includes:

The first is the implementation of the Asia-Pacific Trade Agreement (AIA) agreement tariff rate for commodities originating in South Korea, India, Sri Lanka, Bangladesh and Laos, including 1767 tax items. The average tax rate for these taxes is 8.9%, compared with the MFN rate, the average discount rate. It is 23.3%;

The second is to implement the China-Chile free trade agreement tax rate on commodities originating in Chile, including 7,029 tax items, with an average tax rate of 1.3% and an average discount rate of 87.7%;

The third is the implementation of the China-Pakistan free trade agreement tax rate for goods originating in Pakistan, including 6240 tax items, with an average tax rate of 5.3% and an average discount rate of 43%;

The fourth is the implementation of the China-New Zealand Free Trade Agreement tax rate on commodities originating in New Zealand, including 7,040 tax items, with an average tax rate of 4.0% and an average discount rate of 61.6%;

Fifth, the China-Singapore free trade agreement tax rate for goods originating in Singapore is implemented, including 2753 tax items, with a tax rate of zero and an average discount rate of 100%.

Sixth, starting from 2010, the China-ASEAN Free Trade Area Agreement will implement the fourth batch of normal goods tariff reductions, and more than 90% of the goods on both sides will implement zero tariffs. The China-ASEAN Free Trade Area will fully realize the liberalization of trade in goods.

Benefits from multiple industries According to statistics, in 2008, Zhuji City exported approximately five hundred million U.S. dollars worth of South Korea, India, Sri Lanka, Bangladesh, and Laos to the Asia-Pacific Trade Agreement. In January-November 2009, the export volume was approximately 290 million U.S. dollars. Accounted for one-tenth of the city's total exports, the main export products related to electrical and mechanical, hardware, pearl jewelry and textiles and clothing. Pakistan is one of the key markets for the export of jacquard cloth in Zhuji City; it also exports a certain amount of electromechanical and hardware products. In 2008, the export volume was 34 million U.S. dollars. In January-November 2009, the export volume was 45 million U.S. dollars. Chile is the largest import market in Zhuji. The main import commodity is refined copper. In 2008, the import value was 100 million U.S. dollars. In January-November 2009, the import value was 250 million U.S. dollars. In addition, some textile and apparel and electromechanical equipment products were exported. In January-November 2009, exports to Chile amounted to US$51 million.

According to relevant officials of the Bureau of Foreign Trade and Economic Cooperation, the total amount of commodities exported to countries with contracted tax rates such as Chile and New Zealand accounted for about one-fifth of the city's total exports. The implementation of the treaty tax rate will benefit Zhuji Machinery and Electronics, hardware, pearl jewelry, textiles and apparel, and other industries and import and export companies. The Bureau of Foreign Trade and Economic Cooperation also reminded that the majority of export enterprises also need to do a good job in relevant work such as visas for origin, inspection and quarantine of commodities, and realize the smooth development of bilateral trade.