To realize the biggest freedom for IT product trade in the world, China, in line with the commitments pledged at the entry of the WTO, started to practice the tariff rate for 251 items of IT products as promised in the Agreement for Products of Information Technology since January 1, 2002.

According to the statistics of the Chinese customs, the enforcement of the policy has achieved an effective result with the importation of IT products greatly increased in the first quarter of the year, a rise of 16.3 percent as against that of the same period of last year.

In accordance with the "Agreement for Products of Information Technology" China has put into practice the taxation policy of zero tariff for 122 items of IT products. They include exchangers for mobile communications, big, medium and small computers and integrated circuits, with the items enjoying zero tariff rate accounting for 49 percent of all IT products on the taxation list.

For such IT products as mobile phone-sets, network equipment and others, the policy enforces a low taxation rate as of around 3 percent, making the total taxation rate for IT products to reduce from 12.5 percent to 3.4 percent, a reduction of 73 percent, witnessing the biggest rate-reduction of all commodities.

The first quarter of this year saw China's total import value of IT products reach US$14.85 billion, overtaking one fourth of the total imports in China's foreign trade. The importation of IT products for zero taxation rate in particular came to a total of US$10.06 billion in the first quarter of this year, an increase of 21 percent and taking up more than two thirds of the importation of IT products.

As pointed out by an expert concerned, the enforcement of the "Agreement for Products of Information Technology" has greatly stimulated China's importation of IT products.

In the light of the agreement China will make the importation of most of the IT products to be of zero tariff rate by 2003 and be free of tariff imposition for the importation of all IT products in 2005. With the tariff rate reduced to zero for more and more IT products the coming 5 years are expected to be a peak period for the importation of IT products into China.

The big increase in the importation will on the one hand speed up the transfer of manufacturing, technology research and development and input of capital by transnational corporations into China, providing China with opportunities to become a global base for producing, processing, research and development of IT products. And on the other it will be conducive to domestic enterprises to lower the cost for the procurement of raw materials, thereby creating a favorable condition for China's exportation of its IT products.

(People's Daily May 9, 2002)