A recent announcement made by China officials reveals that import taxes on clothing, cosmetics and some other goods will be cut, thus motivating consumers to invest and market more, for a consistent economic outcome targeted by the country officials.
All the world markets are facing an economical breakdown, with US recently announcing their realistic perspectives for budget growth didn’t meet meet the previously set expectations. Beijing now reacts to the world crisis and finds itself in the midst of a marathon effort to reduce reliance on trade and investment, in order to drive economic growth by nurturing domestic consumption.
Citizens will benefit from tariff cuts starting with June 1st. As an envisioned result of this measure, government officials hope to expand imports. The Finance Ministry released a statement in support of that, saying that “Expanding consumer demand is an important measure for steady growth and structural adjustment”. People
All the clothing items, shoes, skin care products, baby foods and kitchen utensils will be free of import taxes, thus offering better prices and higher chances of investment from the side of common consumers.
For cosmetics, taxes will be lowered from 5% to 2%. Duties and fur garments will benefit from the tax discount, reduced to a range of 7% to 10% from 14% to 23%. Imported sports shoes and ankle boots will benefit from the tax cut to 12% from a range of 22% to 24%. Taxes for disposable diapers will be cut to 2% from 7.5%, according to an official statement from the Finance Ministry in China.
This is a strategy meant to incentivize the economic growth of the country, as evolution in retail sales declined to 10% this year only. Statistics show that imports have lowered in pace with 16%, compared with last year.
This is a clear sign of weak consumer demand and weak consumer demand is a sign of poverty. People are not concentrated on spending anymore, as their resources become more and more limited, making them unable to spend money for something they may not need.
This measure is beneficial in some ways but in others can be a serious alarm call, showing us that levels of poverty are increasing all over the world. Actions taken by the government are set to motivate budget growth but this doesn’t usually happen by cutting some taxes but rather by raising minimum wages, to offer people comfort and affordability for a decent life.