From 22% to 7%: How China Rewrote Its Import Rules for Printing Equipment in Its First WTO Decade

[ppzhan abstract] China's ten years of WTO membership not only transformed its own economic development, but also contributed enormously to the growth of world trade and the global economy. All the commitments we made to the WTO have been fully honored. In those ten years, our printing industry, like other sectors, honored its accession pledges fairly well — cutting tariffs on imported printing equipment, delegating administrative authority, simplifying import procedures, promoting exchanges at home and abroad, and granting foreign investors coming to China many preferential policies, with particularly generous treatment on imported printing equipment that created a sound investment environment for foreign businesses. The major changes in China's policies on imported printing equipment over the decade since WTO accession are reflected in the following aspects.

Fulfilling WTO commitments: import tariffs greatly reduced

Before China joined the WTO, tariffs on imported printing equipment were relatively high. The average import tariff rate on the 28 types of commonly used printing machines announced in 2001 was 16.576%, higher than the overall WTO tariff level. In particular, the offset press that the printing industry had long hoped for carried an import tariff as high as 22%, plus a 17% import-stage adjustment tax (i.e., VAT). To import a US$1 million offset press, one had to pay 100 × (1.22 × 1.17) = US$1.4274 million, of which US$427,400 went to taxes alone. Clearly, the tax burden on an enterprise importing a single offset press was extremely heavy.

After joining the WTO, China earnestly honored its tariff concession commitments and substantially reduced import tariffs year by year (see the attached table). Take offset presses as an example: before accession, the import tariff rate was 22% in 2001, falling to 14.8% in 2002, 12.4% in 2003 and 10% in 2004; thereafter, provisional rates lower than the MFN rate were formulated and documents issued to reduce or exempt taxes on certain high-tech products. For instance, from 2009 the provisional tariff rate for offset presses was 7%, down from 22% before accession—a reduction rarely seen anywhere in the world. From 2009 China also implemented a VAT deduction policy, further easing the burden on enterprises and further promoting the import of printing equipment.

Because China earnestly honored its tariff concession commitments while formulating sound policies and adopting many effective measures, every one of our commitments was well implemented, which promoted the import of advanced foreign technology. Take sheetfed offset presses as an example: 645 units were imported in 2001, 785 in 2002, 933 in 2003, 1,052 in 2004 and 1,135 in 2005, and in each subsequent year the figure has basically remained above 1,000 units.

Import administration authority delegated, import procedures simplified

China's administrative approaches to imports of mechanical and electrical products include import prohibition, import restriction, quota-based imports, imports of specified products, and automatic import licensing administration. The bodies administering such imports include the Mechanical and Electrical Products Import and Export Office of the Ministry of Commerce (a first-level administrative body) and the mechanical and electrical products import offices of provinces (autonomous regions and municipalities), special economic zones, and production and construction corps (second-level administrative bodies). The former is responsible for the approval and issuance of import licenses for restricted products, quota products and specified products, while the latter is responsible for the approval and issuance of import licenses under the Catalogue of Goods Subject to Automatic Import Licensing Administration.

Before China's WTO accession, very few products were subject to automatic import licensing administration; the power to approve and issue licenses rested basically with the Mechanical and Electrical Office of the Ministry of Commerce, and the sheetfed and web offset presses widely used by printing enterprises were for a long time managed first as restricted products and later as specified products. The import declaration procedure was complex and involved many steps: besides approval by governments at various levels in the locality where the enterprise was based, one also had to come to Beijing to seek approval from the Ministry of Commerce and collect the import license, often having to wait in line—this not only increased the burden on enterprises but also reduced efficiency.

After China's WTO accession, the Ministry of Commerce and the General Administration of Customs jointly issued Announcements No. 62, No. 72 and No. 94 in 2003, 2004 and 2005 respectively, and in 2010 issued

— This article is reposted from China Packaging Network (pack.cn). Original link: http://news.pack.cn/show-362080.html