China’s tariff-free economy proposal ‘not feasible’, analysts say
- Huang Qifan, the former mayor of Chongqing, is among a number of experts calling for China to transition to a tariff-free economy
- But most analysts say across-the-board tariff elimination is not feasible given China’s need to protect its infant industries
A suggestion from a prominent Chinese political figure that China should scrap all import tariffs to unleash the country’s economic potential is not possible because it is still necessary to protect infant industries that are critical to national security, analysts said.
However, within the context of free trade agreements, like the Regional Comprehensive Economic Partnership (RCEP) - the outlines of which negotiators from 15 Asian-Pacific nations agreed on Monday - China could lower tariffs to zero for many sectors given its ability to compensate with direct subsidies and other means of support, experts said.
But some prominent reformist figures have urged the central government to go further. Huang Qifan, the former mayor of Chongqing in southwest China, is the chief proponent of the idea that Beijing should implement a system of “zero tariffs, zero subsidies, and zero non-tariff barriers”.
China has already cut by more than 30 percentage points, what’s the big deal if we cut more
Eliminating all tariffs would create an economic breakthrough for China similar to the one it experienced after the country’s accession to the World Trade Organisation in 2001, said Huang, who is now vice-chairman of the government-backed China Centre for International Economic Exchanges think tank.