China to give Zero Tariff on All Imports from 43 LDCs, Bangladesh, Nepal and Included from 1 Dec, 33 in Africa in List

With all tariffs for ‘least developed countries’ scheduled to be removed, China is positioning itself as a trade leader for the Global South

·         Products that fall under tariff quotas, the commission said, only shipments within the quota will be exempted from tariffs.

·         A quarter of merchandise exports from least developed countries went to China in 2021, more than any other country or bloc that year, according to the World Trade Organization.

·         Last year’s exports from the 43 UN-listed countries to China topped US$60 billion, Chinese customs data shows.

·         In 2022, the commission erased tariffs on 98 per cent of taxable products from 16 least developed countries.

·         President Xi Jinping announced the zero-tariff scheme during a September 5 keynote at the Beijing Summit of the Forum on China-Africa Cooperation.

·         China the first major developing country and the first major economy to take such a step.

 

[ABS News Service/29.10.2024]

China will eliminate tariffs for goods from countries classified as the world’s least developed starting in December, a move expected to lower shipping costs from parts of Africa and Asia and give Beijing more sway in global trade.

The zero-tariff treatment for the group of mostly small, non-industrialised countries poses little threat to China’s manufacturing-intensive economy, analysts said, and gives Beijing an edge in emerging markets as the US and Europe attempt to stem the flow of Chinese goods into their own backyards.

The scheme will cover all countries the United Nations considers “least developed” that have diplomatic ties to China, the official Xinhua News Agency reported, citing the Customs Tariff Commission of the State Council.

Of the 43 countries that stand to benefit, 33 are in Africa. The others are Yemen in the Middle East, Kiribati and the Solomon Islands in the South Pacific and Afghanistan, Bangladesh, Cambodia, Laos, Myanmar, Nepal and East Timor – all on the Asian continent.

The tariff scheme, set to take effect on December 1, will apply to every import category, the commission said.

The removal of tariffs means these countries would pay less to ship crops, fruits, seafood or commodities to China – an enormous market – and exporters would in turn save on the transport of household goods, smartphones and electric vehicles to countries that reciprocate.

“China’s decision to extend zero tariffs is a welcome move at a time when protectionism is on the rise,” said Jayant Menon, a senior fellow at the ISEAS-Yusof Ishak Institute in Singapore.

Chinese officials may hope heightened trade relations with poorer, less developed nations will have ripple effects, said Liang Yan, a professor of economics at Willamette University in the United States. Beijing may be angling to earn their support in international bodies, she added, by pushing for open trade over protectionism.

“In the grand scheme of things, China does want to have more solidarity with the Global South, and there’s definitely this idea of power projection,” Liang said.

The Global South is a broad categorisation of the world’s relatively undeveloped countries – many of which were or are colonial subjects.

For products that fall under tariff quotas, the commission said, only shipments within the quota will be exempted from tariffs.

A quarter of merchandise exports from least developed countries went to China in 2021, more than any other country or bloc that year, according to the World Trade Organization.

Last year’s exports from the 43 UN-listed countries to China topped US$60 billion, Chinese customs data shows.

China has sought to cement trade relations with the developing world for the past several years. In 2022, for example, the commission erased tariffs on 98 per cent of taxable products from 16 least developed countries.

President Xi Jinping announced the zero-tariff scheme during a September 5 keynote at the Beijing Summit of the Forum on China-Africa Cooperation.

“This has made China the first major developing country and the first major economy to take such a step,” said foreign ministry spokesman Lin Jian on Friday.