Statistics from the Chinese General Administration of Customs (GAC) show that tariffs in the January-April period reached 20.98 billion yuan (US$2.5 billion), a drop of 6.9 billion yuan (US$831 million) or 24.81 percent from the same period of last year, while the import consumption tax and value-added tax increased 1.34 percent to 53.2 billion yuan (US$6.4 billion).

In contrast, 1999 saw a year-on-year increase of 80.8 percent in Chinese customs revenue, 2000 an increase of 40.9 percent and 2001 an 11.17 percent rise.

Experts attributed the drop mainly to the considerable tariff rate decrease after China's accession to the World Trade Organization (WTO). The average rate has been reduced from 15.3 to 12 percent, a drop of 21.6 percent.

Meanwhile normal trade imports as main tariff sources grew slowly, severely affecting tariff revenue, according to the GAC.

Price falls in some tariff-source goods also led to the revenue reduction, experts said. A decrease of 23.4 percent in imported crude oil prices caused a reduction of 1.77 billion yuan (about US$213 million) in customs revenue during the four months, according to the GAC.

Smuggling did not contribute to the tariff drop, due to a customs crackdown throughout the period. GAC officials said that the drop was not surprising, since similar cases occurred in countries like the United States and Canada after they began to fulfill WTO undertakings on tariff reductions.

(People's Daily May 11, 2002)