China Cuts Import Tariffs on Jewelry

RAPAPORT... China has reduced import duty on 18 jewelry categories byreclassifying them as everyday consumer goods, according to the GuangzhouDiamond Exchange.The Customs Tariff Commission of the State Council has cutthe rate by an average of 68% across those categories, Liang Weizhang, generalmanager of the bourse, told Rapaport News Sunday. The new rates will go into effect on July 1."This is the first time that China [has cut] the importtariffs on jewelry categories in recent years," Weizhang said. The changepresents an opportunity for foreign jewelry brands to move further into theChinese market, he added.The adjustment has come about because China has reclassifiedthese jewelry products as "daily consumer products," whereas, until this point,they had been considered luxury goods, Weizhang explained.Among the items to enjoy a tax reduction are gold- andsilver-jewelry products, which will drop from the 20% bracket to 8%. Tariffs onplatinum and other precious metals will decline from 35% to 10%, as will duty onnatural or cultured pearl products, gemstones and semiprecious stones.The lower rate will probably only affect luxury brands suchas Tiffany & Co. and Cartier, as those are generally the types of jewelersthat import finished pieces into China, said Julius Zheng, vice president ofthe Shenzhen Rough Diamond Exchange.The relatively low tariffs on polished-diamond imports makeit more worthwhile to ship loose stones into the country and assemble thejewelry there, he added. Only the high-end brands whose products carry largeretail price tags have the margins necessary for it to be worth importing jewelry."The tariff cut may boost the sales of such brands oncondition that they choose to reduce their price point accordingly," Zhengsaid.However, only a small portion of Chinese consumers buy thesetop-end products, he noted.The tax may also encourage the import of 18-karat-golddesigner jewelry from Italy, which is popular in China, Zheng continued.China's New Import Tariffs Import Tariffs

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