Lower import tariffs -- opening up with an open mind

BEIJING - Middle-class lifestyle is poised to become more accessible for Chinese consumers with lower prices of imported consumer goods from avocados and whisky to cashmere clothing and ski sets.

From December, tariffs on 187 types of consumer goods will be reduced from 17.3 percent to an average of 7.7 percent. Import taxes on coffee makers, smart toilet seat covers and electric toothbrushes will be cut by two-thirds, and that on mineral water and oral cleaning kits will be halved, according to the Ministry of Finance (MOF).

Lower taxes allow Chinese middle class, especially young consumers, more affordable access to famous foreign brands and upscale lifestyle.

Over three decades, China's population with annual income between 76,600 yuan ($11,6090) and 286,000 yuan has grown from almost zero to 225 million, according to the Economist.

Jiang Zhen with the Chinese Academy of Social Sciences said local brands are unable to satisfy demand for upscale food, cosmetics and baby and maternal products.

China has overtaken Japan as the largest market in Asia for Perrier Water. Water is a vibrant category as Chinese shoppers pursue a "go healthy path", said Jason Wu, general manager at Kantar Worldpanel in Greater China. While local brands account for 70 percent of the market, in the upscale segment, imported brands have the upper hand.

Rosemary Gallagher of the Scotch Whisky Association, said demand for Whisky from China increased by 45 percent in the first six months. The cut in tariffs will give another boost to Scotch and should encourage the premium Scotch whisky market to expand.

Affluent residents in Beijing, Shanghai, Guangzhou and Shenzhen are major consumers of upscale imported goods. Through e-commerce, consumers in second and third tier cities also have easier and cheaper access to the products.

China plans to import $2.4 billion of goods in the next 15 years to meet domestic demand and balance trade with its partners.

Zhao Jinping, a researcher with the Development Research Center of the State Council, said the new tariffs will encourage competition between foreign and local brands. China is never afraid of competition, indeed it thrives on competition.

By joining the World Trade Organization, rather than shying away from competition, China joined the global production network and became a major trading nation, a winner in globalization, he said.