China to exempt tax on US soybeans, pork

By Ma Jingjing Source:Global Times Published: 2019/12/6 17:47:15

Move depends on domestic need as sources of imports expand: experts

Imported soybeans seen at a port in Nantong, East China's Jiangsu Province. Photo: IC

China is currently working on tax exemptions for some of the soybeans and pork it imports from the US, in light of applications from domestic enterprises.

Experts say the quantity of US agricultural products China imports is dependent upon its own needs instead of catering to US political demands or pressure.

The Customs Tariff Commission of the State Council said on Friday that it will designate a range of goods for exclusion from tariff countermeasures against the US' Section 301 move.

The decision comes as China is facing a soybean shortage, as well as a declining pork supply due to the outbreak of African swine fever.

China consumes about 110 million tons of soybeans each year, of which about 80 percent are imported, Ma Wenfeng, a senior analyst at the Beijing Orient Agribusiness Consultancy, told the Global Times on Friday.

In 2018, China's soybean imports dropped for the first time in seven years, down 7.9 percent to 88 million tons.

The declining trend continues this year. The country's soybean imports decreased 8.1 percent year-on-year to 70.69 million tons in the first 10 months of 2019, data from the General Administration of Customs showed.

However, China is still making efforts, based on real needs and market principles, to increase its soybean purchases from the US. The Ministry of Commerce said in October that China had bought 20 million tons of US soybeans thus far this year.

Traditionally, Brazil, the US and Argentina are China's three major soybean import sources, but due to an increasing production capacity and price advantage, Brazil has been squeezing the US' Chinese market share.

In 2018, Brazilian soybeans accounted for about 75 percent of China's total imports, while the US supplied about 19 percent, Ma said.

However, US President Donald Trump is looking to ask China to purchase $40-50 billion worth of US agricultural products in order to reach a phase-one trade deal - about twice the value exported to China last year - CNBC reported.

US farmers may not be a huge constituency but they are key to Trump's re-election campaign in 2020, it said.

"China will not buy the US' threats," Li Guoxiang, a research fellow at the Chinese Academy of Social Sciences, told the Global Times on Friday.

If the US puts an end to the trade war, China is willing to talk with it about the agricultural imports problem based on mutual benefits and domestic market needs, but any deal reached cannot sacrifice China's interests, he said.

"China's purchasing practice is not for the benefit of US politics, and the US cannot manipulate China's importing behaviors," he said.

Amid the prolonged China-US trade war, China is expanding its import channels as well as its domestic production.

Brazilian farmers now are worried that if China and the US reach a trade deal, Brazil's soybean exports to the Asian country will drop sharply, said Chen Beier, the China manager of US futures brokerage firm RJO, on Thursday at a grain and oil industry forum held in Xiamen, East China's Fujian Province.

Meanwhile, China is gradually expanding its soybean acreage. The country's soybean plantation area grew 10.9 percent to 140 million mu (9.3 million hectares) in 2019, data from the National Bureau of Statistics showed on Friday.


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