The Chinese Finance Ministry plans to significantly lower import tariffs on luxury consumer goods, Reuters news reported Monday. The reduction in customs duties, which are intended to increase domestic spending and influence industries and service sectors, might lead to an increase in spending on middle-and high-end products, such as watches, cosmetics and electronic products.
[via Reuters]: “Owing to hefty import taxes, prices of 20 luxury brands of watches, suitcases, clothes, liquor and consumer electronics in China are 45 percent higher than those in Hong Kong, 51 percent higher than U.S. prices, and 72 percent higher than French prices, a study by China’s commerce ministry showed.”
Lat year, Chinese tourists were the biggest group of foreign shoppers in France, buying nearly a billion dollars of duty free items. A decrease in import tariffs should include more goods and certainly benefit a much wider population. According to Investment group CLSA forecasts, China is set to become the world’s premier market for luxury items by 2020 as the country’s flourishing middle-class indulges in high living.
It’s no surprise that the government would like to release that sort of consumer spending at home.