CHINA's plan to lower the import tariff rate on 4,000 items will help to increase business for Hong Kong's freight forwarders, OCBC Securities research director Martin Ching says. The effect would be seen as early as the spring or summer quarter next year. He said the plan to cut import tariffs from 36 per cent to 15 per cent within three years would stimulate additional trade growth and consequently increase cargo volume growth. Factors affecting investment, such as the austerity measures or the Ninth Five-Year Plan, would also affect the forwarding business, he said. Hong Kong-listed freight forwarders AWT and BALtrans said they welcomed the new measures, as the growing import business could offset downward export volume due to the cut in the VAT tax rebate in July. BALtrans China department senior manager Louis Lee said a slowdown of exports due to reductions in duty refunds had a knock-on effect on the air freight industry. BALtran's profit margin on imports could reach 20 per cent but the export margin was less than 10 per cent. He said most of the imported goods were high technology machinery, while export goods were low-priced products, such as toys or garments. Mr Lee said the forwarding business in China accounted for only 10 per cent of the company's total turnover, although there was a substantial amount of forwarding business between Hong Kong and China. The company has seven representative offices in China. Chairman of AWT World Transport Holdings Alfred Lam said: 'If we know the affected items, we are going to directly contact the overseas suppliers and mainland buyers for the transportation service.' Between 10 and 15 per cent of AWT Holdings' revenue at present comes from the mainland. In the fashion retailing sector, analysts predicted that Goldlion Holdings would be one of the chief beneficiaries of the tariff reduction. HG Asia Research analyst Anne Fokstuen said Goldlion derived about 70 per cent of turnover from China. About 85 per cent of its products sold in China last year were imported. 'A cut in import tariff will help lower the import costs of Goldlion items in China, which in turn would improve its profit margins,' Ms Fokstuen said. She said Goldlion had told analysts it would achieve a 40 per cent growth in sales in China from April to June this year and a 30 per cent growth from July to September. Goldlion's share price jumped soon after the announcement of the tariff cut. Ms Fokstuen said the company's recent announcement of a tobacco joint-venture and coming interim results had contributed to the sharp rise. Chaifa Holdings, Playboy and Garfield garments distributor, whose China business generated 80 per cent of its total turnover last year, would face more challenges in the long run, analysts said. It was argued that Chaifa could no longer shelter behind existing tariff protection as the lower tariffs would encourage more foreign brands to enter the market. About 30 per cent of Chaifa's garments were sourced and manufactured in China, while only 10 per cent of its shoes and accessories were imported last year, the analysts said. But company director John Chan said tariff cuts would benefit the company and he was 'extremely optimistic' about its future in the mainland market. Mr Chan said Chaifa expected 90 per cent of its total turnover to be derived from the mainland market. Alan Wong, of W.I. Carr Research, said the impact of tariff cuts on Giordano International would be insignificant. This was because most of the fashion items sold on the mainland were sourced and manufactured in China. Kent Rossiter, at Sun Hung Kai Securities, also said there would be little impact on other high-end goods retailers, such as Dickson Concepts and Joyce. 'The exposure of Joyce in the mainland market is limited,' Mr Rossiter said. He said high-end goods in China were not affordable for the majority of customers, which tended to make business difficult for their distributors.