China moves to open up its economy
Credit to Author: Tempo Desk| Date: Fri, 28 Dec 2018 17:01:05 +0000
CHINA announced a new package of trade tariff cuts last Dec. 24, lowering import taxes on over 700 items starting Jan. 1, 2019. It was in line with President Xi Jinping’s vow at the 40th anniversary of China’s “Reform and Opening Up” last Dec. 18.
The new tariff cuts are a welcome development in the face of the ongoing trade war between the United States (US) and China. Their exchange of tariff increases on each other’s products have also come to affect other nations exporting to them.
But China appears determined to step up its international trade, with the continuing tariff cuts – the third round since President Xi Jinping announced tariff reductions to cut costs for China’s consumers while opening the economy to other nations.
Its Ministry of Trade announced lower tariffs on over 700 goods. Some materials for pharmaceutical manufacturing as well as livestock feed for agriculture will now have zero tariffs. Taxes on high-tech imports will be set “relatively low.” Even some US exports will receive the benefit of the reductions, although most of its goods will still be subject to the retaliatory tariffs until there is a breakthrough in ongoing talks.
The Philippines stands to benefit from this new stage in the opening up of China’s economy. After his visit to Manila last November, President Xi Jinping said on his meeting with President Duterte: “We charted the future course of China-Philippines relations and drew an ambitious blueprint for its development. The President and I agreed to elevate our relationship into one of comprehensive strategic cooperation.”
At the China National Expo held in November in Shanghai, Philippine companies sold $124 million worth of goods and services, twice the targets set by the Department of Trade and Industry. Philippine trade with China, including Hong Kong, has now reached 29.1 percent, compared to 15.2 percent with the US. But the overall trade gap is still against the Philippines as it is importing more than it is exporting.
Philippine productivity and exports should improve as China imports more food and fruits for its rising middle-class consumer market, and as it extends its assistance to our “Build, Build, Build” projects, particularly in irrigation and transportation. China opened a consular service in Davao City and launched a Davao-Quanzhou airline link this month, which should facilitate tourist arrivals and exports of Mindanao fruits.
At a time when there is so much uncertainty in international trade relations, arising partly from the US-China trade war, we welcome China’s new effort to open up its market and boost its economic ties to other countries, particularly our own, as the new year begins.