RAPAPORT… China has reduced import duties on 18 jewelry categories by reclassifying them as everyday consumer goods, according to the Guangzhou Diamond Exchange.
The Customs Tariff Commission of the State Council has cut the rate by an average of 68% across those categories, Liang Weizhang, general manager 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 import tariffs on jewelry categories in recent years,” Weizhang said. The change presents an opportunity for foreign jewelry brands to move further into the Chinese market, he added.
The adjustment has come about because China has reclassified these 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- and silver-jewelry products, which will drop from the 20% bracket to 8%. Tariffs on platinum and other precious metals will decline from 35% to 10%, as will duty on natural or cultured pearl products, gemstones and semiprecious stones.
The lower rate will probably only affect luxury brands such as Tiffany & Co. and Cartier, as those are generally the types of jewelers that import finished pieces into China, said Julius Zheng, vice president of the Shenzhen Rough Diamond Exchange.
The relatively low tariffs on polished-diamond imports make it more worthwhile to ship loose stones into the country and assemble the jewelry there, he added. Only the high-end brands whose products carry large retail price tags have the margins necessary for it to be worth importing jewelry.
“The tariff cut may boost the sales of such brands on condition that they choose to reduce their price point accordingly,” Zheng said.
However, only a small portion of Chinese consumers buy these top-end products, he noted.
The tax may also encourage the import of 18-karat-gold designer jewelry from Italy, which is popular in China, Zheng continued.
China’s New Import Tariffs
| Import Tariffs | ||||
|---|---|---|---|---|
| HS Code | Description of Goods | Current Rate | New Rate After July 1, 2018 | |
| 71131110 | Silver jewelry and parts thereof, inlaid with diamond | 20% | 8% | |
| 71131190 | Other silver jewelry and parts thereof | 20% | 8% | |
| 71131911 | Gold jewelry and parts thereof, inlaid with diamond | 20% | 8% | |
| 71131919 | Other gold jewelry and parts thereof | 20% | 8% | |
| 71131921 | Platinum jewelry and parts thereof, inlaid with diamond | 35% | 10% | |
| 71131929 | Other platinum jewelry and parts thereof | 35% | 10% | |
| 71131991 | Other precious metal jewelry and parts thereof, inlaid with diamond | 35% | 10% | |
| 71131999 | Other precious metal jewelry and parts thereof | 35% | 10% | |
| 71132010 | Jewelry of base metal clad with precious metal, inlaid with diamond | 35% | 10% | |
| 71132090 | Other jewelry and parts thereof, of base metal clad with precious metal | 35% | 10% | |
| 71141100 | Silver wares and parts thereof | 35% | 10% | |
| 71141900 | Other gold and silver wares and parts thereof | 35% | 10% | |
| 71142000 | Gold and silver wares and parts thereof, of base metal clad with precious metal | 35% | 10% | |
| 71161000 | Natural or cultured pearls | 35% | 10% | |
| 71162000 | Precious or semi-precious stones | 35% | 10% | |
| 71171100 | Cuff links and studs | 35% | 10% | |
| 71171900 | Other imitation jewelry of base metal | 17% | 8% | |
| 71179000 | Other imitation jewelry of unlisted material | 35% | 18% | |
Image: Humphery/Shutterstock
