China Cutting Tariffs On 700 Items Amid Push To Boost Imports By $30 Trillion

As part of China's efforts to open its economy - something its leaders have been touting at least since President Xi's keynote speech at the 2017 World Economic Forum - Xi revealed on Monday a detailed breakdown of what will be the third round of tariff reductions this year, measures that were teased by President Xi during a speech nearly two months ago.

The plans to spend more on foreign goods are part of China's plan to import an additional $30 trillion over the next 15 years as the world's second-largest economy continues its transition from an industrial powerhouse to a service-focused economy, according to Bloomberg.

In addition to the $30 trillion in goods (which is higher than the $24 trillion previously promised by Xi), China is also hoping to increase services imports by $10 trillion during the same period. The measures come as China is weighing whether to abandon its "Made in China 2025" initiative and speed up the liberalization of its economy and its openness to foreign competition as a means of reducing wasteful state-directed spending that has heavily contributed to the massive pile of bad debt swirling around China's corporate sector.

China

The tariffs will have the added bonus of cutting costs for Chinese consumers at a time when a dramatically weaker yuan is expected to stoke inflation. The announcement follows a raft of disappointing economic data released earlier this month raised fears of a global recession (and sent stocks around the world tumbling lower).

Before Trump takes credit for the cuts as another victory in his trade war with China, Bloomberg pointed out that Xi's latest comments "don't move the needle very far on trade policy". China has already cut tariffs this year (case in point: the recent reductions in auto tariffs) and has repeatedly said it's planning more cuts.

The lowered tariffs, which will impact some 700 goods, will take effect on Jan. 1. The "temporary" rates can be changed at will and also can be lower than the current most-favored nations levels, though these tariffs will also apply to goods imported from all WTO members. 

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