China Cancels Import Duties for Major Technical Equipment

April 8, 2013 Posted by China Briefing Reading Time: 3 minutes

Apr. 8 – With a view to boost domestic demand and promote industrial upgradation across the country, China’s Ministry of Finance, together with three other central departments, released the “Circular on Adjusting the Catalogs Relating to Import Duties for Major Technical Equipment (Caiguanshui [2013] No.14, hereinafter referred to as ‘Circular’)” on March 25, 2013, which scraps import duties and import-related value-added taxes on a range of technical equipment from April 1, 2013. Detailed information can be found below.

According to the Circular, from April 1, 2013, eligible domestic enterprises that import key components or raw materials required for the manufacturing of the following items are exempt from import duties and import-related value-added taxes.

Direct-current equipment
High-speed railway signaling systems
Complete sets of waste sorting systems and equipment
Lifting fire engines
Dyeing machines
New agricultural machines
Solar cell equipment
Lithium-ion battery equipment
Key equipment for integrated circuits
Equipment for manufacturing new flat panel displays
Equipment for manufacturing electrical components

Furthermore, the Circular has re-imposed import duties on some goods, including the components and raw materials for hydraulic supporting equipment.

For enterprises that import the components and raw materials for the above-mentioned items, they should register with the proper customs and taxation authorities for a tariff exemption review between April 1 and April 30.

Among all the listed items, the tax exemptions for solar cell equipment has attracted special attention, as it has been deemed as a positive signal to the China-Europe solar dispute negotiations.

In September last year, the European Commission launched an anti-dumping investigation into Chinese solar panels, and two months later, China fired back by filing a complaint with the World Trade Organization against photovoltaic solar subsidies in the European Union.

So far, negotiations between the two regions have not made any significant progress. China last month urged the European Union to prudently handle the ongoing trade dispute over the nation’s exports of solar products, indicating an unfavorable ruling may lead to retaliation from China.

“If the EU insists on imposing restrictions on Chinese exports and therefore causes serious harm to the interests of Chinese manufacturers, the Chinese government will not stand by. We’ll have no choice but take any measure necessary to protect the lawful rights of our enterprises,” said Chong Quan, Deputy International Trade Representative for China’s Ministry of Commerce.

However, according to experts, by exempting the solar cell devices from import duties, China is showing that it doesn’t want the trade dispute to escalate and is also asking Western countries not to be too harsh with their anti-dumping measures.

In 2012, China’s exports of photovoltaic products decreased by 35 percent, among which the export of solar cells and the sub-assemblies decreased by over 40 percent.

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