The above 67 types of paper will enjoy a temporary import tax rate of 0-5%, regardless of the import origin.
Including medium paper, linerboard from recovered paper materials, boxboard from virgin or recycled pulp, and both coated and uncoated high-grade printing paper (UFP).
China has also decided to exempt the standard 5-6% most-favored-nation (MFN) tax rate on imports of these types until the end of 2023.
With the issuance of this decision, it will increase the supply of paper products and enhance the resilience of production, consumption and supply chains.
The Chinese government’s implementation of this tariff cut has had a strong impact on the Chinese paper industry because the Chinese government has never granted zero import tax on so many major paper and board (P&B) types.
According to manufacturers and suppliers, the most affected packaging paper (containerboard) is the medium and linerboard made from recycled paper materials. Since 2017, when the ban on imported recovered paper raw materials (RCP) took effect, China’s imports of these two types of paper have skyrocketed to meet the shortage of raw materials.
According to China Customs data, linerboard imports into China reached 5.85 million tons in 2020, but decreased by 9.4% to 5.30 million tons in 2021.
The decline in import volume is due to the high prices of recovered paper abroad, and high shipping costs make imported products less competitive in price.
Due to the economic downturn, the situation will continue into 2022, further weakening buyers’ demand for foreign packaging materials.
Medium paper and recycled linerboard imports totaled 4.31 million tons in the year to November 2022, down 11.2% year-on-year.
However, imports of the two main types still account for about half of China’s total paper and paperboard imports.
Due to the large import volume, although the value is relatively low, the tax reduction from 5-6% to 0% will make a big difference to the import cost of these two products.
Import taxes on most types of boxboard made from virgin and recycled pulp have also been reduced from 5% to 0%.
However, the price of this type in China has previously been The import duty on coated and uncoated high-grade printing and writing paper (CFP and UFP) is also relatively low due to oversupply, so the possibility of large-volume imports is unlikely.
However, for coated and uncoated high-grade printing and writing paper (CFP and UFP), the Chinese market is currently oversupplied and also enjoys a zero import duty policy, which may promote imports from abroad, especially from Indonesia, and potentially create high price competition for this product in China.
Unbleached kraftliner (KLB), bleached and unbleached kraft paper, and newsprint remain at the same tariff levels, unaffected by the tariff reduction new.
China’s abolition of its COVID-free policy in early December 2022, along with the decision to cut import tariffs on most imported papers, will create opportunities and promote manufacturers in other countries, especially in Southeast Asia, to increase production and export of these items to the Chinese market./.