China will cut import tariffs on nearly 1,500 consumer products as from July 1, including gold jewelry set with diamonds, as well as precious stones, in a bid to boost imports as part of efforts to open up its economy. A total of 18 tax items involving jewelry categories are included in the tariff reduction, with an average tariff rate drop of 68%. The import tariff rate for gold and silver jewelry products, including those set with diamonds, will be reduced from 20% to 8%; the rate for gemstones or semi-precious stones products, along with natural or cultured pearl products will be reduced from 35% to 10%; and the rate for platinum and other precious metal products will also drop from 35% to 10%. The average tariff rate of all 1,449 products imported from most favoured nations will be reduced by more than half, to 6.9% from 15.7%, the finance ministry said in a statement on its website.
Liang Weizhang, general manager of Guangzhou Diamond Exchange, said this is the first time that China is cutting the import tariffs on jewelry categories in recent years. In the past, jewelry has more often been regarded as a luxury product, but now it has been listed as daily consumer goods, says Weizhang. The tariff cuts will be conducive to opening up the Chinese market to imports, and will be a huge boost for foreign jewelry brands, as they have long faced a large price differential with the same products sold elsewhere as a result of the tax, forcing many consumers to buy abroad. China is one of the most important luxury and jewelry markets worldwide, and the gateway to China is opening up more and more. In December, China cut import taxes on almost 200 consumer products including food, health supplements, pharmaceuticals, garments and recreational goods to 7.7 percent on average from 17.3 percent, the finance ministry said.
Click here for a graph provided by the Guangzhou Diamond Exchange showing the changes to the Comprehensive Tax Rate for some jewelry items.