Port of Shanghai, China
At least 30% of vehicles purchased for public use must be electric and hybrid, the Government announced. Adjustment of customs duties on materials, goods and products comes with reductions and increases from January 1st.
China’s Ministry of Finance announced this Monday a guideline according to which at least 30% of vehicles purchased for public use must be electric and hybrid.
The ministry explained that “in principle, new energy vehicles should represent at least 30% of the total” of acquisitions.
According to the guideline, government procurement agencies must give priority to purchasing these vehicles as long as they meet the necessary functional and operational requirements, state television CCTV reported.
The ministry further said that for situations where vehicles have fixed routes, such as those intended for confidential communications services or operate primarily in urban areas, only electric models should be purchased. The department also provides for the contracting of car rental services, remembering that, in these cases, government bodies must prioritize the use of electric vehicles.
In an attempt to promote these types of cars, reduce pollution in Chinese cities and boost the new energy sector, local and national authorities in China have in recent years announced all kinds of measures, including tax measures.
The penetration rate of these vehicles in the Chinese market reached 25% in 2023compared to 15% in Europe and 8% in the United States, according to a study published last year by the consulting firm Bain & Company.
20% growth
Sales of electric vehicles will follow those of cars with internal combustion engines in China by 2025, according to industry data, while grow by around 20% for more than 12 million units.
This number of domestic sales of electric vehicles – including pure batteries and hybrids – would be more than double the 5.9 million sold in 2022, according to estimates from investment banks and research groups cited by the British newspaper.
The rapid growth of the Chinese electric vehicle industry now threatens German, Japanese and American brands, which have dominated the global car market for several decades.
Adjustments for almost a thousand products
This Saturday, the Asian nation also announced an adjustment to customs duties on more than 900 materials, goods and products from January 1, including the reduction of tariffs for some imports.
The measure provides for the introduction of “provisional import tariffs that will be lower than the rates applied to most favored countries on 935 products,” said China’s government Customs Tariff Commission, the State Council.
According to the World Trade Organization, since 2020 foreign consumer goods pay a average customs duty of 6.9%in addition to a Value Added Tax (VAT) of 13%.
In a statement cited by the official Chinese newspaper, the commission said the The objective is to “expand domestic demand and promote high-level opening” and “improve synergy between national and international markets”.
What goods are on the list?
The list of goods that benefit from a tariff reduction includes: vinyl alcohol and some polymers and copolymers, “to promote technological innovation”; automatic transmissions used in the manufacture of specialized vehicles such as fire trucks; nickel-titanium alloy wires used in surgical implants; other components to “safeguard and improve public welfare”; and recycled aluminum and copper materials to “promote green and low-carbon development”.
On the contrary, the Asian country will increase tariffs on some imported goods and productssuch as certain syrups and mixtures that contain sugar at their base, always “in accordance with the development of national industries and changes in the dynamics of supply and demand”, said the commission.
The change will have effects on products from the 34 regions and countries with which China is linked through one of the 24 free trade agreements to which it is a signatory.
The change does not affect the 43 least developed countries with which China maintains diplomatic relations, which will continue to benefit from rate zeroincluding Angola, Guinea-Bissau, Mozambique and Timor-Leste.
