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16 giugno 2015

China reduces duties on luxury by half

It’s good news for Made in Italy, but some calls for caution…

It is in force since June 1st, in China, the reduction of up to 50% of customs duties on 14 categories of import products.
The measure, introduced by the Commission for customs tariffs of the State Council to meet the growing demand for foreign luxury, concerns footwear, clothing for men, women and children, but also cosmetics and other luxury products. Duties on handbags, small leather goods, jewelry and watches remain unchanged, at least in this first phase.
The import duty rates are reduced to 7% for knitwear, 8% for outerwear, 10% for clothing and 12% for footwear.

According to analysts at Mediobanca, this decision will benefit primarily businesses like Ferragamo and Tod’s that already have a high turnover with China.
The downside is the braking that the flows of Chinese spending on international markets will suffer. The prohibitive pricing policy adopted so far, actually, had pushed million Chinese people to travel abroad to buy these kinds of goods at competitive prices, and return home without paying taxes.

«The tariff reliefs are substantial and the prospects are good for our exports», the Deputy Minister for Economic Development  Carlo Calenda said.
The Vice President of Fondazione Altagamma Armando Branchini is more prudent. He takes note of the positive news, but points out with some concern, at the same time, the forthcoming introduction of the local tax on luxury on costs exceeding 30000 renminbi (about 4400 Euros).
The fear of the drop in consumption – primarily those in Europe, which are already penalized by the depreciation of the Euro – also depends on the debate on the likely imminent implementation of the second phase of VAT.

List of percentage reductions by product type:

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