President will deliver a keynote speech to kick off the weeklong trade fair in Shanghai, which has attracted about 3,000 companies from around the worldBut while foreign firms are free to display their goods there, they’ll still face the non-tariff barriers that make it hard to sell them
President Xi Jinping will seek to promote China as an advocate for globalisation and free trade on Monday when he officiates at the launch of the inaugural China International Import Expo in Shanghai.
He is expected to deliver a keynote speech to kick off the weeklong trade fair, which has attracted about 3,000 companies and traders from around the world, all of which want a slice of China’s massive consumer market.
Among them will be Peter Pan, a Chinese-American entrepreneur who runs a factory in southern California that makes personal care products. He is exactly the kind of businessman that warms US President Donald Trump’s heart, after selling his operations in eastern China about three years ago and relocating to the US.
But while Pan has rented 12 booths at the Shanghai trade fair to display thousands of his products, at the moment he cannot sell any of them in China.
Despite setting up a sales office in Shanghai last year, and beginning the process of registering 100 products – covering everything from detergents to cosmetics – as required by Beijing, not one of them has been approved. The process has so far cost him 1.5 million yuan (US$217,000).
The extent of the Chinese bureaucracy has eroded Pan’s patience and comes on top of an unexpected rise in sales and production costs because of the escalating US-China trade war. Caught in the middle of the latest round of retaliatory tariffs, he now has to pay 10 per cent more – a figure that could increase to 25 per cent on January 1 – on packaging materials imported from China.
Also, he said he would have to pay an import tariff of 10 per cent in China if he was ever “fortunate” enough to receive the approvals necessary to sell his made-in-the-US shampoo and skincare products in the world’s most populous nation.
Pan’s experience illustrates the difficulties many foreign companies face when trying to sell in China. The perceived lack of a level playing field is one of the core issues at the heart of the US-China trade war and is something the Shanghai expo is unlikely to do anything to change.
While Beijing lowered the average tariff on nearly 200 categories of imported goods to 7.7 per cent from 17.7 per cent last year, cut tariffs on some imported consumer products three times this year, and pledged zero import duties on certain goods on display at the import expo, invisible and more complicated non-tariff obstacles on imports remain pervasive, and in some industries, are becoming increasingly prominent.
Non-tariff measures – from anti-dumping taxes and subsidies to price and quantity controls – are not uncommon in international trade.
