Beijing, April 28, 2024 – In a significant move aimed at promoting a more open economy, China has officially passed a new law on customs duties, state media Xinhua reported on Friday.
The legislation, adopted by the Standing Committee of the National People’s Congress (NPC), China’s top legislative body, is set to take effect on December 1, 2024.
This new law is a key component of China’s strategy to foster a higher level of economic openness and integrate more deeply into the global economy.
According to officials, the law will uphold the basic stability of the existing tariff system while maintaining the overall tax burden at its current level. This approach is designed to provide predictability and security for international traders and investors who engage with China’s vast market.
Li Xuhong, a professor at the Beijing National Accounting Institute, emphasized the law’s significance in a statement to the press. “This law is of significant importance for advancing high-level opening up and fostering a market-oriented, law-based, and internationalized business environment,” Li stated. This legislation aligns with China’s ongoing reforms aimed at improving its regulatory frameworks to support economic growth and global integration.
The enactment of the customs duties law marks a further step in the maturation of China’s tax legislation system. It becomes the 13th of the country’s existing 18 tax categories to be governed by a formal law, underscoring the government’s commitment to a rule-based approach to taxation. This systematic codification of tax laws is part of a broader effort to make China’s tax regime more transparent, equitable, and aligned with international standards.
Experts believe that the new law could have several key impacts on international trade. By maintaining the stability of the tariff system, China aims to avoid sudden shifts that could disrupt trade flows and economic relationships. This stability is particularly crucial as the global economy continues to navigate the uncertainties brought about by geopolitical tensions and pandemic recovery.
Moreover, the law is likely to impact how multinational corporations strategize their operations and investments in China. With the overall tax burden unchanged, businesses can plan with greater certainty, without fearing unexpected increases in tariff costs. This predictability is vital for long-term investment decisions and could help attract more foreign direct investment into China.
Additionally, the law may contribute to a more level playing field in international trade. By adhering to a law-based approach to customs duties, China signals its readiness to engage in fair and regulated trade practices, which could enhance its relationships with major trading partners and global economic entities like the World Trade Organization.
This legislative development comes at a time when China is increasingly looking to assert its economic influence on the global stage. By refining its customs duties framework, China not only aims to boost its domestic economic interests but also to present itself as a committed player in the promotion of global trade and economic stability.
As December approaches, the international community, along with domestic and foreign businesses, will be keenly watching how this new law’s implementation might influence trade patterns and economic relationships both within and beyond China’s borders.
