Tariffs and non-tariff barriers

Since entering the World Trade Organisation (WTO) in December 2001, China has taken measures to comply with its WTO trade commitments. These commitments include lowering tariffs, reducing non-tariff barriers, expanding market access for foreign firms and improving transparency. Although China has implemented progressive reforms in certain areas (most notably import tariff reductions), exporters perceive that a variety of non-tariff trade barriers still remain which impedes access to the China market. 

The Australian Federal Government is currently conducting Free Trade Agreement (FTA) negotiations with China to eliminate or reduce tariffs and non-tariff trade barriers for Australian exports. For further information, please refer to the Australia-China Free Trade Agreement Negotiations.

Import tariff

China’s import tariff rates are calculated based on the Harmonised System (HS) of Classification Codes. There are two columns of tariffs according to the Most Favoured Nation (MFN) Rates and the General Rates. The MFN Rates apply to those countries that have concluded trade treaties or a reciprocal agreement for preferential treatment with China, or more broadly speaking are member countries of the WTO. (Australia is included in this group). The General Rate is applied to those countries that have not concluded a reciprocal agreement with China. Please refer to the APEC Tariff Database for China tariff rates. 

Import tariff rates also vary according to the type of product, components and the intended use of the products. Most import tariff rates are ad valorem, assessed as a percentage of the CIF value. 

Average tariff rates on imports have dropped to 9.8 per cent, with agricultural products at an average of 15.3 per cent and industrial products at an average of 8.95 per cent (at 2007). China has also adopted a policy of tariff exemption on certain imported equipment and machinery that encourages scientific research and technology development, and investment in key hi-tech industries.

Foreign exporters sometimes experience difficulties with inconsistent application of customs classifications, tariff rates and import controls by local customs officials. 

Non-tariff barriers

Import restrictions

The Chinese authorities divide imports into three categories:

• Contraband goods, which are prohibited from import. Prohibited imports include weapons, poisons, and toxic chemicals.
• Restricted goods that require an import licence or quota.
• Permitted goods under which most imports are categorised.

The Chinese Government issues ‘Public Information Notices’ to inform of actual or impending policy changes and categories of goods. Many of these notices are issued in Chinese and are not translated into English. Information on policy releases in English can
be found on China’s Ministry of Commerce website.        

The Chinese Government administers an ‘import licence’ system on the importation of certain restricted goods, in order to strictly monitor the content or volume. On 1 April 2007, the Chinese Government relaxed the import licensing requirement on 338 categories of products, requiring Chinese importers to apply for an ‘automatic import license’.

China’s Ministry of Commerce and the General Administration of Customs are responsible for determining the products included in the Merchandise Catalogue of Permitted Automatic Import Goods. Products in this catalogue are free from import restriction, however are still recorded by the Ministry of Commerce. 

China has a wide range of tariff rate quotas (TRQs) that are based on a two-tiered tariff system. Global access is granted for a specific import quota at a low rate, and then excess imports are charged at a higher rate. Given that Chinese tariff rate quotas are placed on certain sensitive agricultural products, this creates a non-tariff barrier to trade for many Australian exporters. The following are some of the items that operate under tariff rate quotas:

• Raw wool/wool tops
• Sugar
• Wheat
• Cotton
• Rice
• Diammonium phosphate
• Urea imports
• NPK compound fertilisers

Other non-tariff barriers that may restrict trade are covered under the respective content headings for 'Doing Business' in China.

Austrade can assist you by identifying appropriate service providers in this area, and help you to understand the general issues.

Additional information on China’s Customs and Trade news can be found on PricewaterhouseCoopers Asia Pacific - Customs and Trade webpage.