Before 9 a.m., Zhu Feng, a customs declarant with Decheng Customs Broker Company went to Suzhou Customs declaration hall and consulted Xu Haoyuan, an officer of Tariff Section, for China-South Korea FTA related policies. Zhu Feng said with a smile, “I hear there will be tariff reduction for a great number of Chinese and Korean goods, and many enterprises in Suzhou High-Tech Development Zone engaged in trade with South Korea have called me to ask for the policies. They are all waiting for my reply!”
The Free Trade Agreement between the People’s Republic of China and the Republic of Korea (China-South Korea FTA) was signed on December 9. Both sides have confirmed the Agreement will formally come into effect for the first tariff reduction on December 20, 2015, and the second tariff reduction is expected to take place on January 1, 2016. Within 20 years of transition period, the number of zero-tariff Korean products will reach 92.2% of all taxable items and 91.2% of import volume, while the number of zero-tariff Chinese products will reach 90.7% of all taxable items and 85% of import volume. The trade between China and South Korea is about to enter “the era of zero-tariff”.
As one of the enterprises asking Zhu Feng for the FTA policies, Mando (Suzhou) Automotive Chassis System Co., Ltd. is an auto part manufacturer in Suzhou under South Korean Halla Group. The import-export value of Mando reached over 200 million yuan from January to November, up 98.9% on a year-on-year basis. To a Korean-funded enterprise with strong growth momentum, the FTA implementation will certainly make it even better.
At present, there are around 1,300 enterprises engaging in import/export trade with South Korea within Suzhou City, which means approximately 1,300 enterprises will benefit from the FTA. During January-November, the total value of import and export between Suzhou and South Korea reached CNY14.404 billion, including total export value CNY3.82 billion and total import value CNY 10.584 billion. “Tariff reduction is the most direct and friendliest benefit to enterprises, allowing Korean-funded firms to save a lot of money for new productivity.”