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China to lower fashion tariffs to boost home spending

By Don-Alvin Adegeest

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Fashion

Visit any luxury fashion store in London and you'd be hard pressed to not see Asian or Middle Eastern shoppers. It is precisely this demographic that keep the tills ringing at Burberry and Chanel, rather than the British.

Back in May, China's Ministery of Finance announced it would reduce tariffs on clothing, footwear and beauty imports by as much as 50 percent, in order to foster domestic spending and keep Chinese shoppers within its borders.

Luxury goods tariffs made their first decline in 8 years

While the government has been slow to implement changes, luxury goods prices in China have dropped 1.8 percent year-on-year marking their first decline in eight years.

According to the Hurun Luxury Consumer Price Index, luxury jewellery fell an average of 3.6 percent, but clothing could be reduced to 7-10 percent from 14-23 percent and sports footwear is expected to be halved to 12 percent.

Depreciating foreign currencies and the Chinese government’s ongoing crackdown on extravagance were key reasons for the fall in luxury prices.

In spite of the down trends, Rupert Hoogewerf, founder and chief researcher of Hurun Report, told China Daily that Chinese consumers would continue to shop for luxury, as they made more overseas trips and product information transparency improved.

If this will have implications for the UK remains to be seen. Back in 2013 Britain began the process to streamline the visa application process for visitors from China, as UK retailers were missing out on the 65 billion pounds that came from high-spending Chinese tourists.

Image: Chinese shoppers

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