Mainland China will reduce tariffs on popular imported consumer goods to boost spending amid the economic slowdown, the State Council announced yesterday. Observers said the move could have an impact on Hong Kong's retail sector. After a meeting chaired by Premier Li Keqiang, the State Council said boosting domestic consumption was an important step to stabilising economic growth, and urged departments to come up with detailed plans to carry out the policy soon. It said there would be a trial run by June for imported products in high demand. It also called for adjusting the current consumption tax policy that importers also face on bringing in everyday items, such as cosmetics, clothing and accessories. More duty-free shops will be set up at ports of entry, while overseas tourists are likely to enjoy an easier process claiming back sales tax. More regular inspection of online shops that sell foreign-made goods import will also be established, while other "unreasonable fees during the import process" will be dropped. The State Council's decision came after mainland retail sales grew 10.2 per cent in March from a year earlier, slowing from 10.7 per cent in the January-February period. Economic growth slowed to 7 per cent in the first quarter of this year. Mainlanders appear to be more willing to head overseas to buy not just big-ticket luxury items but also regular household goods. Reports of mainlanders snapping up toilet lids in Japan have raised concerns over domestic product quality and triggered calls for lowering tariffs. Zhao Ping, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce, said the tariff reduction could drive mainland retail sales growth 0.5 to 1 percentage point higher. "That would be a rather remarkable push," she said. Some imported products, such as cosmetics, carry up to 30 per cent consumption tax. In addition, some companies must pay between 5 per cent and more than 20 per cent in import duties, she said. Hong Kong tourism sector lawmaker Yiu Si-wing said the exact impact of the policy on the city's visitor arrival numbers and parallel trading problem could not be assessed until the scope of the changes was announced. He expected the mainland authorities to take a gradual approach and for Hong Kong to continue enjoying certain advantages over shops on the other side of the border. The city in any event offered a wider variety of goods at higher quality, he said. "Hong Kong products may not be much cheaper" than their mainland rivals after the tax cuts, but their "safety is guaranteed". Still, it was time for long-term tourism planning and speedier infrastructure development by Hong Kong, he said. "We need to find ways to attract overseas tourists and repeat visitors," he said. "We can't rely only on mainland shoppers."