Tariff cuts alone not enough to encourage people to buy at home

As of June 1, the import tariffs on 14 kinds of consumption goods, including clothing, shoes and skin care products were reduced by as much as 50 percent. Will that stop people buying these products overseas? Comments:

Price is not the only factor that decides where consumers buy products. The majority of people rush to purchase overseas products because they trust the quality more than domestic products. In order to bring consumption back within its borders, China needs to upgrade the industrial chain and promote innovation so that domestic enterprises make quality products, too.

xinhuanet.com, May 31

The tax authorities that set high tariff rates years ago must never have thought that people would do their shopping overseas instead of buying imported products at home. It is a wise decision to cut the import tariffs because that will help get the profits back into the country.

Nanchang Daily, June 1

Tariffs account for only a small percentage of the heavy tax burden that makes the domestic consumption costs high. For example, for an imported product labeled about 3,000 yuan ($485), domestic dealers could pay an import tariff of 150 yuan, 765 yuan in value-added tax and more than 1,300 yuan in consumption tax; the tax cut saves only a limited amount of the tariff. More tax cuts are needed if the authorities mean to attract consumers back from overseas.

Gao Wenyao, president of the Shanghai International Fashion Federation, June 1

The cut in tariffs will help start a robust engine for the domestic economy, which is witnessing relatively lower growth. In 2014 alone, Chinese residents spent over 1 trillion yuan on shopping overseas; experts estimate that if half of that can be spent at home, the growth rate will be increased by another 2 percentage points.

Zhang Jingwei, a researcher at independent think tank Chahar Institute, May 27