Companies monitoring the impact of planned tariff cuts

PUBLISHED : Monday, 27 November, 1995, 12:00am
UPDATED : Friday, 28 October, 2016, 9:17am

NEWLY-LISTED companies are monitoring the impact of Beijing cutting import tariffs on more than 4,000 items.

A spokesman for home-ware maker Magician Industries (Holdings), said it was difficult to predict any 'real effects' on the company until details of the reductions were released.

But he said there would be no 'obvious impact' as far as the initial announcement was concerned.

About 67 per cent of Magician Industries' products manufactured in China were exported to the United States this year.

Chen Man-lung, of China Everbright Securities, said any impact on Magician would depend on how deep the tax cuts were and what kinds of products were covered.

Plastics trading and manufacturing company Luen Fat Hong International Holdings appears not to be affected by the tariff reductions.

Gerald Lau, deputy vice-president, said an increase or a decrease in import tariff rates would not have any significant impact on the company.

He said only a small portion of the company's raw materials were imported because the majority of the products sold in China were sourced and manufactured there.

Sales in China accounted for 55 per cent of total turnover ended March this year.

First Sign International, the sole agent of Montagut in China, Hong Kong and Macau, said the cut in import tariffs would benefit numerous sectors, but the company would not benefit directly from the tariff cut. Director Harry Lau said this was because their transactions were done in Hong Kong.

He said the impact of the cuts on the company would be seen in January because it would then begin signing up new contracts for next year's autumn and winter seasons.

Analysts said First Sign would face more challenges in the long-term as more new foreign brands emerged in China.

Ladies shoe-maker Prime Success International also looks likely to be unaffected by the tariff cuts.

An analyst said the cuts would not hurt the company's competitiveness due to strong market demand for low-end shoes.

He said the company's established sales network and the popularity of its brands enabled Prime Success to remain price competitive.