On May 30, the State Council executive meeting decided to decide to reduce the import tariffs on daily consumer goods in a larger scope, so as to better meet the diversified consumer demand of the masses. The meeting decided that from July 1 this year, the average import tariff rate on clothing, shoes, hats, kitchens and sports and fitness products will be reduced from 15.9% to 7.1%.

Subsequently, on May 31, the State Council Customs Tariff Commission issued the "Announcement on Reducing Import Tariffs for Imported Consumer Goods." According to the announcement, the MFN tariff rate for some imported consumer goods is reduced, involving 1,449 tax items. Due to the adjustment of the MFN tariff rate, from July 1, 2018, the MFN provisional tax rate for 210 imported commodities was cancelled, and the MFN provisional tax rate for other commodities continued to be implemented.

What changes will the tax reduction bring to the market structure?

Significantly reduce the tariffs on imported garments, and how much challenge will it bring to China's garment industry? How to interpret the tax reduction list?

Among the 1449 tax reduction tax items, there are about 430 related to textiles and clothing, accounting for about 30% of the total number of tax reduction tax items. Xu Yingxin, vice president of the China National Textile and Apparel Council, said in an interview with the China Textile News that the scope of the clothing products and the tax reductions in the list are relatively large. Among them, the tariffs on most of the products have been reduced from 16% and 14% to 6%, and the tax reduction has exceeded half, and only a few categories have remained at 8%, 10% and 12%. After the tax reduction, the overall import tariff level of clothing is close to the EU, and the MFN import tariff rate is far lower than that of the United States. It reflects the overall goal of “promoting a new pattern of comprehensive opening up” established by the 19th National Congress, and actively sharing the market with the world and expanding its openness. Mentality.

It is understood that China Textile Federation has previously submitted relevant recommendations to the Ministry of Finance. From the results of tax reduction, it is recommended to adopt it on some products.

Xu Yingxin said that from the perspective of China's imported clothing pattern, Italy and Vietnam are the two most important sources of imported clothing in China. According to customs statistics, China imported 3.81 million garments from Italy in 2017, with a total value of about 810 million US dollars. The average unit price of imported garments is as high as 200 US dollars, mainly high-grade garments. Among the clothing products imported from Vietnam, mainly the fast fashion brands popular in the market, among which the knitting garments are more prominent, and it is also the representative of the basic demand products of the masses in China.

The reporter noted that the statistics of the General Administration of Customs showed that the amount of clothing imported from the above two countries last year maintained a high growth rate of 12.9% and 22.2% respectively. On the one hand, Italian high-end ready-to-wear has a strong brand effect and appeal in the minds of consumers, and its fashion design, quality and crafts are recognized by the Chinese consumer market; on the other hand, it reflects the fast fashion of Chinese residents to basic needs. Consumer goods also have strong demand.

What are the benefits worth looking forward to?

The reporter noticed that in this list, men's knitted or crocheted coats, suits, casual suits and other products, as well as synthetic fiber knitted or crocheted women's suits, etc., import duties Both have been significantly reduced from 25% to 10%, which is undoubtedly very attractive to consumers.

For consumers, the most concern is how much the market price of imported clothing can drop, and how big the decline is. Some analysts pointed out that the sales price of imported clothing products, including the price of imported products, import tax, commercial circulation, and other parts of the cost structure, it is difficult to simply use a reduction or digital ratio to summarize. How much consumers will benefit from it, and data needs to be spoken. However, it can be confirmed that after the tax reduction will bring more complete market competition, it will attract more foreign brands and design products to enter the Chinese market, the richness of market products will increase, and the space for consumers to choose will be greater.

How big is the industry facing challenges

Xu Yingxin believes that after the tax reduction, the countries represented by Italy and those that have not signed a free trade agreement with China will benefit the most. For example, Italian clothing, which is famous for its design, quality and brand advantages, will have a larger market space in China.

In addition, with the transfer of textile processing industry to Southeast Asia in recent years, Vietnam is becoming a production and procurement base for international fast fashion brands. The advantage of the fast fashion brand will further consolidate the growth of the Vietnamese garment market share. China’s free trade agreement with ASEAN has been implemented since 2010. Since the import of zero tariffs from ASEAN, Vietnam has also become a major source of apparel imports in China. Last year, China imported nearly US$1 billion worth of clothing from Vietnam, accounting for 14.5% of China’s imported clothing. It is expected to continue its high growth in the future.

Then, will Chinese garment enterprises face more challenges? Xu Yingxin believes that from an industrial perspective, enterprises should face this matter with a positive attitude. At present, the efficient operation level of China's textile and apparel supply chain has strong market competitiveness in the international market. The further opening of the market will objectively promote the transformation of the industry and promote the improvement of quality, variety and brand.

Some industry insiders pointed out that if the import of Chinese clothing is greatly increased after the reduction of import tax, it will stimulate the enthusiasm of local brands to participate in competition and learning. Local brands have the stage to compete with world brands without presiding over the country, and can accumulate more experience in participating in market competition. Therefore, from this perspective, this tax reduction has positive significance.