2023 Import-Export Tariffs in China

The State Council has announced new adjustments to the China import-export tariffs for 2023 to address domestic supply and demand and assist with a pro-growth agenda in the coming year. These adjustments include tariff waivers for key medical goods, tariff increases on certain commodities to assist domestic industries, and the addition of new tax items. We explain the latest adjustments to the import and export items and discuss the reasons behind the changes.

China will adjust import and export tariffs on selected goods in 2023 in a bid to support high-quality development and opening up under the dual circulation strategy, the Customs Tariff Commission of the State Council (the ‘Commission’) said on Thursday, December 29, 2022.  

According to the Announcement of the Customs Tariff Commission of the State Council on Adjusting the Tariffs in 2023 (the 2023 Tariff Adjustment Plan), in 2023, China will impose tariffs on 8,948 tax items, and the country’s overall tariff level will be reduced from 7.4 percent to 7.3 percent.

Starting from January 1, 2023, 1,020 items, including anti-COVID drugs, will be subject to provisional import tariff rates, which are lower than the most favored nation (MFN) tariffs. On the other hand, import and export tariffs on some commodities will be raised to assist with the development of domestic industry and cope with changes in supply and demand. 

Starting from July 1, 2023, China will implement the eighth step of the MFN tariff rates reduction on 62 information technology (IT) products, further lowering China’s overall tariff level.

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Besides, in accordance with the relevant provisions of the Regional Comprehensive Economic Partnership (RCEP) and the entry into force of the RCEP in Indonesia, some goods originating in Indonesia will be subject to RCEP tariff rates starting from January 2, 2023.

Moreover, China will add some tax items in 2023 to meet the needs of industrial development and scientific and technological progress. The preferential tariff rates will continue to be applied to the least developed countries that have established diplomatic relations with China and completed the exchange of documents, so as to support and help the least developed countries accelerate their development. 

Below we take a closer look at the changes introduced in the 2023 Tariff Adjustment Plan. 

What are the changes and which items will be affected?  

China to implement provisional import tariffs on 1,020 commodities  

Starting from January 1, 2023, China will impose provisional import tariff rates on 1,020 items, which will be lower than the most favored nation (MFN) tariffs. These commodities can be classified into the below categories: 

• First, to protect the people’s health and reduce the economic burden on patients, zero tariffs will be imposed on some raw materials for anti-cancer drugs, anti-COVID-19 drugs, and anti-cancer pain relief drugs, and import tariffs will be lowered on medical supplies such as dentures, raw materials for vascular stents, and contrast agents.  
• Second, in line with the trend of consumption upgrading, China will reduce import tariffs on homogenized mixed food, frozen blue cod, cashew nuts, and other food for infants and young children, as well as small household appliances such as coffee machines, juicers, and hair dryers.  
• Third, to strengthen resource supply capacity and improve the resilience of industrial and supply chains, China will implement zero tariffs on potash fertilizer and unwrought cobalt, and reduce import tariffs on some wood, paper products, boric acid, and other goods.  
• Fourth, to promote the innovative development of advanced manufacturing and accelerate industrial transformation and upgrading, China will lower import tariffs on lithium niobate, electronic ink screens, iridium oxide for fuel cells, roller bearings for wind turbines, and other products. 

China to increase import and export duties on certain commodities  

From January 1, 2023, China will raise import and export duties on some commodities to balance domestic demand and supply as well as upgrade its domestic industries. The changes include:   

• Reimposing MFN tariffs on imports of chestnuts, licorice, and products thereof, large tires, and sugarcane harvesters. 
• Increasing export tariffs on aluminum and aluminum alloys. 

China to further reduce MFN tariff rates on IT products   

Starting from July 1, 2023, China will implement the eighth step of the MFN tariff rates reduction on 62 IT products. After the adjustment, China’s overall tariff level will be reduced from 7.4 percent to 7.3 percent. 

China to apply conventional tariff rates on products from 29 countries  

To promote the high-quality opening of markets, China will apply conventional tariff rates on selected goods originating in 29 countries and regions for 2023 in accordance with China’s 19 free trade agreements (FTA), including the RCEP. Among them, in accordance with relevant provisions of the RCEP and the entry into force of the RCEP in Indonesia, some goods originating in Indonesia will be subject to RCEP tariff rates starting from January 2, 2023. 

China to add more tax items  

In order to meet the needs of industrial development and scientific and technological progress, China will adjust its subitems appropriately in 2023, adding tax items such as white tea, vegetable seeds, surgical robots, and lidar. After this adjustment, the total number of tariff items is 8,948. 

How to read the changes? 

China first introduced its dual circulation strategy in 2020. This is a two-pronged development strategy that seeks to spur China’s domestic demand in addition to catering to export markets and creating conditions that allow domestic and foreign markets to boost each other. 

According to China’s 2022 Central Economic Work Conference (CEWC), an annual meeting of China’s top leadership to set out the economic agenda for the next year, in 2023, China will endeavor to expand domestic consumption and attract foreign capital, in order to boost its economic growth. An optimized tariff system is beneficial to both.

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Besides, with China moving to a “living with COVID” model, the abrupt case surge has raised concerns over China’s healthcare system and supply chain resilience. Against this backdrop, it is not hard to understand why some drugs and medical supplies have been subject to zero tariffs or reduced tariffs. 

Regarding the added tax items, Zhang Xuebiao, a researcher at the Agricultural Information Institute under the Chinese Academy of Agricultural Sciences, said that the addition of agricultural products, such as white tea and jasmine tea, is conducive to boosting the development of specialty farming and enhancing the brand awareness of relevant companies.  

In general, the 2023 tariff adjustments reflect the country’s intention to secure its industrial and supply chains. They also aim to reallocate resources to promote technology innovation, industrial upgrades, and green development, and help boost China’s participation in the restructuring of the global industrial chains and the global free trade network.   

The 2023 tariff adjustments could affect companies that import and export taxable goods and services with China. Foreign stakeholders should pay attention to these changes to better tap into China’s growing consumer markets. 

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