China’s Ministry of Finance said on Dec. 28 that the communist regime will lower import tariffs on ethane and some recycled copper and aluminum raw materials from Jan. 1, 2025.
Provisional import tax rates lower than the most-favored-nation tax rate will be applied to 935 commodities, the ministry said in a statement.
The purposes of the import tariff adjustment are “to increase the imports of high-quality products” and “to promote green and low-carbon development,” according to the ministry.
Analysts told The Epoch Times that there are military, economic, and geopolitical considerations behind the Chinese communist regime’s tariff reduction.
China lacks copper, U.S.-based economist Davy J. Wong told The Epoch Times, and so lowering import tariffs on recycled copper will help reduce China’s manufacturing costs of high-quality oxygen-free electrolytic copper, much of which is exported after being processed.
“It will also help China to gain a better position in future negotiations with European countries, the United States, and Japan, as processed copper products are exported to these countries,” Wong said.
As the world’s largest buyer of copper, China also dominates the global copper supply chain, especially in smelting, refining, and semi-manufacturing. China’s refined copper exports surged in 2024, reaching an eight-year high.
The Chinese regime also has military considerations, Wong said. “Some of the recycled copper can be used in the production of weapons, such as bullet casings, and some other military products. Aluminum is used in large quantities in making aircraft and weapons,” he said. The lowered import tariff will help “to meet China’s own military production needs and sustain its weapon exports to North Korea and Russia,” he said.
Sun Kuo-hsiang, professor of international affairs and business at Nanhua University in Taiwan, told The Epoch Times that given the geopolitical tensions in the region, and between China and the West, “lowering the import tariffs of recycled copper and aluminum raw materials can mitigate the risk of disruption for China’s supply chain while establishing a more stable import channel.”
He cautioned that China’s tariff reduction could shift the global flow of resources, such as recycled copper and aluminum, toward the Chinese market, “which may affect the supply chain structure of other major importing countries, such as Europe and the United States, resulting in more intensified competition [for the resources].”
China will also reduce the import tariffs on cycloolefin polymers, and ethylene-vinyl alcohol copolymers, effective on Jan. 1, according to the announcement.
These petrochemical materials, along with recycled copper and aluminum, are essential for both the manufacturing and military industries. They are widely used in power transmission, construction, and transportation. While China has a significant demand for these materials, its domestic production is limited, leading to a high reliance on imports, Sun said.
“Tariff reduction on the raw materials imports will lower the costs of domestic energy-intensive industries and improve the stability of the industrial chain,” Sun added. “Which will enable China to maintain competitiveness in high-tech fields such as new energy and electronics industries to cope with Western countries’ technological containment and supply chain restrictions.”
Expanding Free Trade Network
To further expand its network of free trade zones around the world, China will continue to grant zero-tariff treatment to products from the 43 least developed countries that have diplomatic relations with China and apply favorable tariffs to certain products from 34 countries based on 24 free trade and preferential trade agreements in 2025, the ministry said in the announcement.The China-Maldives Free Trade Agreement will take effect on Jan. 1, with tariff reductions and exemptions, the ministry announced.
The free trade agreement with the Maldives is “to further consolidate China’s economic and strategic influence in the Indian Ocean,” Sun said. As a transportation hub connecting the Middle East, South Asia, and Southeast Asia, “the geographical location of the Maldives is of great significance for controlling shipping in the Indian Ocean,” he said.
By promoting the China-Maldives Free Trade Agreement and other free trade arrangements and reducing tariffs on recycled raw materials, “the [Chinese Communist Party] hopes to expand its economic influence on non-Western countries and build a more stable international trade network to reduce pressure from the United States and its allies,” Sun said. It’s because “China has realized that its reliance on Western high-end technology and critical resources is a strategic weakness in its trade war with the West,” he explained.
The free trade agreements may make neighboring countries in South Asia and Southeast Asia more dependent on the Chinese market, and “these countries may give China trade priorities over the United States and the European Union,” Sun said.
Wong shares a similar view. “Through the free trade agreement network, Beijing is looking for a greater voice and bargaining chip in the global economy and supply chain, aiming to increase its influence in Southeast Asia and even global geopolitics,” he said.
