(Ecns.cn)--Chinese consumers may have to pay more for imported skin care products despite tariff cuts starting next year, the Southern Daily reports.
Tariffs on 730 categories of commodities will be lowered to an average of 4.4% from January 1, 2012, less than half of the most-favored-nation tariff rate, announced the Chinese Ministry of Finance on December 15. Tariffs on imported skin care products will be reduced by 1.5% from the current 6.5%.
At present, China levies tariffs, consumption tax and value-added tax on imported beauty products, making prices in the mainland over 33% higher than in Hong Kong. As a result, some people who frequently go abroad have become part-time traders by helping friends purchase cosmetic and skin care products at airport duty-free shops
Many consumers have been cheered by the news, but their happiness may become disappointment, since the margin tariff cuts are negligible compared to the increase of advertising expenses and labor costs.
High Street brands, including Christian Dior, Lancome, Biotherm and Chanel, simultaneously raised the prices of their products by 5 to 10% on the first day of 2011, and rumors of a fresh round of price hikes have been circulating online along with the countdown to 2012.
"We won't be sure about whether there will be a price rise or not until New Year's Day, but it's possible if we consider the situation of 2011," a salesperson at Chanel said.
Industry analysts say the real influential factor is the consumption tax set at a rate of 30%, which will be waived during the 12th Five-year Plan period.
According to a China luxury market study from 2010 conducted by business consulting firm Bain & Company, Chinese people spent 16.9 billion yuan ($2.67 billion) on High Street cosmetics, perfume and personal care in 2009, and the market was expected to maintain strong growth momentum.
