Already a rumour for some weeks: The Government in China is looking forward to lower the import tax on luxury goods. This is good news for Guo Mei Mei and all other big spenders in the mainland. No need to go HK anymore - maybe only for image reasons (surely as long there will not be ZERO import tax in China - HK always will be cheaper). But the real "riches" they anyhow go Milan, Paris or London - no matter the price.
Please read here from 19.07.11 THE STANDARD (Hong Kong):
Beijing's hint of luxury
Staff reporter Tuesday, July 19, 2011
In Beijing's Caishikou Department Store, people are buying gold as if they are purchasing vegetables. And in the Shin Kong Place shopping mall, sales of luxury products such as Gucci and Prada are set to reach 400 million to 500 million yuan annually.
And that, according to a top Beijing official, is why the time is fast approaching for tariffs on luxury goods to be lowered in the mainland.
Such a move will boost sales and consumption and is in keeping with the 12th Five Year Plan, Zhang Guoqing, the deputy director of policy research at the Ministry of Commerce said yesterday.
But he stressed the final decision and the timing rest with the Ministry of Finance and not the Commerce Ministry.
"High tariffs on luxury goods no longer reflect the actual situation in China's economic development," Zhang said in an interview in Beijing with Sing Tao Daily, sister publication of The Standard.
"It is generally accepted that an appropriate adjustment of tariffs on luxury goods is necessary and should be done ... if you don't adjust it, people will buy these goods overseas and help other countries' consumption."
High tariffs are intended to discourage people from adopting a luxury lifestyle - but times have changed with the rise in incomes and people's aspirations to pursue a certain quality of life.
When the prices of goods in the mainland are double or even higher than their cost outside the country, local money flows overseas, Zhang said. He believes that billions of yuan now going overseas will remain in the country if tariffs are lowered.
Mainland consumers spent four times more on branded luxury goods in overseas markets than in the domestic market last year, due primarily to the large price differences, a recent World Luxury Association survey found.
It was reported in June that tariffs on items including cosmetics, cigarettes and liquor will be among the first to be slashed by up to 15 percentage points, followed by jewelry, clothes, bags and watches. No timetable was given for when this will happen.
Earlier, Ministry of Commerce spokesman Yao Jian said it is "inevitable" that the mainland will lower some tariffs on imported goods, especially mid to high-end products.
If the Finance Ministry decides to go ahead with the cuts, Hong Kong retailers selling luxury goods and the tourism trade might be affected.