China Tobacco Market Opens up With Modified Trade Policy

摘要

The wishful thinking of some U.S. traders and farm groups that China would again become a large buyer of their tobacco turned out to be elusive in the last three years. While some trade analysts glowed at the way China was reducing import duties and trade barriers, they underestimated that Zimbabwe would be the leading beneficiary of China's changes, and not the U.S. Along with WTO guidelines, China's import duty on leaf tobacco fell from 40% which had prevailed in the late 1990's to 10% for 2004. This trade policy move provided opportunities for exporters in Zimbabwe and Brazil, while having little impact on purchases from more expensive sources. A reduction for the import duty on cigarettes from 65% ad valorem to 25% has caused China's cigarette manufacturers to strive to improve quality and limit competition from imports. In 2003, imported brands usually cost about 50 cents per pack more than domestic premium brands. Most of the cigarettes sold in China are for very low prices, often less than 20 cents per pack.