China said Monday that it will cut import duties on apparel, footwear and cosmetics by an average of 50 percent in an effort to stimulate domestic spending and economic growth.
The news comes amid China’s slowing economy—the country reported 7 percent growth year-over-year in the first quarter, its lowest in six years.
China’s Ministry of Commerce said it will cut the taxes on imports including suits, fur garments and shoes starting June 1. Tariffs on cosmetics will drop from 5 percent to 2 percent and diaper duties will dip from 7.5% to 2 percent.
Import tariffs on Western-style clothing will fall to between 7 and 10 percent from 14 to 23 percent, according to the Ministry, and taxes on ankle boots and sports shoes will be reduced by half to 12 percent.
Growth in China’s retail sales declined a touch from March’s 10.2% to 10 percent in April, and imports fell 16.2%, signaling lackluster consumer demand.
But the duty’s designated purpose is to encourage Chinese consumers to spend more at home instead of shelling out cash overseas, as duties that can make some goods as much as 20 percent more expensive at home often make Chinese shoppers spend elsewhere. The apparent price gap between China and other markets could limit any immediate impact from the tax cuts.
The duty reductions are expected to be a boon both for global companies and for Chinese stores that have lost business to foreign brands.
According to Reuters, companies like Procter & Gamble, Nike, Adidas, Japan’s Unicharm Corp and L’Oreal are among those that stand to benefit from the lower import duties.