China will cut import duties on apparel, footwear and cosmetics by 50 per cent on an average, in an effort to stimulate domestic spending and economic growth. This is probably a response to the slowing economy, the country reported seven per cent growth year-on-year in the first quarter, its lowest in six years.

China will cut taxes on imports, including suits, for garments and shoes, starting June 1. Tariffs on cosmetics will drop from five per cent to two per cent and diaper duties will dip from 7.5 per cent to two per cent.

Import tariffs on western-style clothing will fall to between 7 and 10 per cent from 14 to 23 per cent, and taxes on ankle boots and sports shoes will be reduced by half to 12 per cent. Growth in China’s retail sales declined from March’s 10.2 per cent to 10 per cent in April, and imports fell 16.2 per cent, signaling lackluster consumer demand.

The duty reductions are expected to be a boon both for global companies and for Chinese stores that have lost business to foreign brands. They are meant to encourage Chinese consumers to spend more at home instead of shelling out cash overseas as duties that can make some goods as much as 20 per cent more expensive at home often make Chinese shoppers spend elsewhere. The apparent price gap between China and other markets could limit any immediate impact from the tax cuts.