32 countries to remove China from preferential tariff treatment on Dec. 1

TAIPEI (Taiwan News) — China Customs says 32 countries will no longer provide preferential tariff treatment to the world’s largest exporter from Dec. 1, and an economic expert says labor-intensive businesses will bear the brunt of the development.

According to a statement recently issued by the General Administration of Customs of China (GACC), 32 countries will remove China from their trade preference lists of beneficiaries of duty-free tariff treatment of certain products, Hong Kong media reported. The GACC applauded the move as “a recognition from other advanced economies that China does not belong to the bracket of low-income and lower-middle-income countries anymore and that Chinese products are competitive enough in the market that (they need) no protections.”

“We are ‘graduating’ from the GSP (Generalized System of Preferences) program and are ’sort of’ moving towards becoming a mature economy,” it stated.

The preferences were given to China starting in 1978, and some 40 countries have granted or are still giving it duty-free treatment on certain exports. Starting Dec. 1, 27 EU nations, the United Kingdom, Canada, Turkey, Ukraine, and Liechtenstein will no longer grant China this treatment, leaving the nation eligible for GSP trade benefits from only three countries — Norway, New Zealand, and Australia.

Chunghwa Economy and Finance Association Deputy Secretary General Tseng Chih-Chao (曾志超) told RFA that the end of duty-free market access to China will leave little impact on its overall exports. Labor-intensive and low-margin businesses, however, will bear the brunt, and that might speed up the relocation of production from China to other developing countries as a result, he said.