Import tariffs on auto parts maintain

Some media reported yesterday that China’s tariffs on imported auto parts will be reduced to 10% from 1st September on and domestic automobile prices will drop correspondingly. Related responsible person from Ministry of Commerce China said yesterday afternoon that the report is unfounded and is purely misreading of the policy. The import tariffs on auto parts is current 10%, there’s no issue of reduction.

Last Friday, the Ministry of Industry and Information Technology, the National Development and Reform Commission amended the “Import Management” section of “Automobile Industry Development Policy”, which will be brought into effect from September 1. The most important part of the modification is, it’s no longer been using “The Measures for the Administration of Import of Automobile Components & Parts Featuring Complete Vehicles”, which is came into operation from April 1 2005.

In early 2005, China cancelled the quotas management measures for import car. A few multinational car companies made use of the difference between the tariff for whole vehicle and for vehicle parts. They used the method of dispersing the whole car into small pieces and importing separately, and assembled the pieces in China in order to “covertly avoiding tax” and to engage in unfair competition.

Chinese newspaper Information times reported that: this management measures were carried into execution since April 1, 2005, and the third regulation for approved standard features of whole vehicle, which were in July 1, 2006 published, delayed to be acted till July 1, 2008 due to some controversial opinions of this approved standard. However, it has never been carried out.

Some foreign car companies considered this management measure violating of China’s WTO accession commitments and restricting the import of foreign auto parts into China.

Nowadays, there’s a few amount of SUV and luxury cars assembled in China, and the annual import volume is only tens of thousands, which is only few thousandth of the total amount of domestic car production. This kind of imported vehicle parts are all according to the whole vehicle tariff, which is 25% of the paid customs duties. The imported king parts has always been a 10% rate of payment of customs duties. (Jianfei)

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