Import duties on bicycles to be slashed

PUBLISHED : Saturday, 10 February, 1996, 12:00am
UPDATED : Saturday, 10 February, 1996, 12:00am

CHINA says it is cutting back import duties on motorcycles and bicycles by almost half from April 1 as part of its drive to enter the World Trade Organisation (WTO).

The government said tariffs on motorcycles with engine sizes of up to 800 cc would be slashed to 70 per cent, from 120 per cent.

Larger motorcycles would see tariffs cut to 50 per cent.

Import duties on mountain bikes, sports bicycles and other bicycles would fall to 50 per cent from 90 per cent.

Shanghai Forever Bicycle, a leading maker of bicycles, did not expect to suffer a severe impact as a result of the substantial cuts to tariffs on imported bikes.

China's largest bicycle exporter China Bicycle (Holdings), however, said the tariff cut would not be enough to ease trade conflicts with other countries.

Shanghai Forever, a B-share firm in Shanghai, said lower import duties would not hurt sales because it already competed with bicycles made on the mainland by Taiwanese manufacturers such as Giant Manufacturing.

Wang Shiqin, an official in Shanghai Forever's securities office, said China made far more bicycles than it imported.

As part of a drive to boost production capacity, Shanghai Forever paid 11.73 million yuan (about HK$10.9 million) for a 51 per cent stake in Suzhou Bicycle Factory, the biggest maker in Jiangsu Province.

China Bicycle managing director Jerome Sze said: 'We hope for zero-rated import duties on bicycles.' The company's sales to the United States and Europe had been hit by anti-dumping charges that the Shenzhen-listed, B-share company sold bicycles below cost.

'There are a lot of trade conflicts as China is increasing bicycle exports, but foreign investors are barred from selling to the mainland,' Mr Sze said.

Less than 20 per cent of China Bicycle's production is sold in China, but it planned to raise the proportion to 50 per cent in the next three to four years as Chinese consumers began to afford upmarket bicycles.

He said the company's exports had an ex-factory price of US$150, while those for domestic sales were priced about 800 yuan.

Shenzhen North Jianshe Motorcycle Co, China's second-largest motorcycle maker, said its business would not be affected by the cuts to import tariffs.

North Jianshe planning department manager Dong Xiaodong said the tariff cuts would not have a big effect on his company because his firm manufactured motorcycles in the 50 cc to 80 cc range.

Mr Dong said that Jianshe's 50 cc motorbikes retailed at less than 3,000 yuan, compared with more than 6,000 yuan for imported motorcycles.

After the tax cut they would be at least a third cheaper.

Mr Dong said that the tariff cut could have a minor effect on the company's 100 to 150 cc model range, which it planned to start manufacturing this year.

Jianshe, which floated B shares in Shenzhen, planned to produce 1.1 million motorcycles this year, Mr Dong said. It produced a million motorcycles last year.

Lower tariffs also were announced for aircraft, space craft, helicopters and tanks.

According to the new rates published yesterday, tariffs on aircraft of more than 45 tonnes will be reduced from 5 to 3 per cent.

Tariffs on non-motorised fishing vessels and cruise boats will be halved to 10 per cent while motorised vessels will have their tariffs cut from 9 to 7 per cent.