Since July 1, China has begun the eighth phase of tax cuts on the information technology agreement expansion products, marking Chinas full commitment to complete the agreement.This initiative has triggered a major change in the information technology industry, bringing significant overlapping benefits to global economic growth and innovation development.

The average tariff rate for the 62 products covered by the tax reduction was reduced from 1.7% to zero.After the tax reduction, Chinas total tariff level was reduced from 7.4% to 7.3%, which includes important medical devices such as B superdiagnostics, ultra-colour diagnostics, nuclear magnetic resonance imaging devices, X-ray breaking inspectors and so on.This is important for reducing the cost of import of medical equipment and better meeting the medical needs of the domestic people.

The Information Technology Agreement expansion agreement contains a wide range of products, including traditional IT products, such as printers, semiconductor production equipment, audiovisual products, etc., but also high-tech communications equipment, medical equipment, instrumentation, etc. Experts believe that these products are included in the expansion scope is the main reason that the information technology industry is the basic industry of the national economy.

According to the observation of the director of the Institute of Industrial and Economic Studies of the Cedi Research Institute, these products are not only widely used in production, such as integrated circuits, electronic components, instrument instruments and other products are widely used in photovoltaic, automotive and other industries, reducing the tariffs of these products will promote the development of information technology products, but also help to reduce the cost of the downstream industry; and in life, consumer electronics, medical equipment and other products are closely related to peoples lives, reducing tariffs will bring significant economic benefits.

It is that the information technology industry is a typical industry with the value chain attributes of the global industrial chain. In the context of the long industrial chain and the number of participating countries, global tariff concessions will accelerate the free flow of information technology products and services, thereby bringing more significant overlapping linkage benefits to global economic growth and innovation development.

From a global perspective, the Information Technology Agreement expanded the global trade volume of related products in 2016 to $18.5 trillion, rising to $27.1 trillion in 2022, growing more than 45% over seven years, is a reversal growth achieved under a complex economic situation. According to experts estimates, Chinas imports in 2022 will be about $4035.5 billion, accounting for 12.6% of Chinas total imports.

In view of the assessment results, China’s tariff reduction commitments have been fulfilled since 2016, although some of the imports have increased and the trade deficit has expanded, but overall, China has benefited from the information technology agreement expansion tax reduction.

Finally, experts believe that tax cuts will bring significant benefits to final consumption. The most direct benefit is to reduce import costs and promote the continued decline in the prices of information technology products. In addition, the tariff cancellation will also help to accelerate the global popularity of information technology and products, according to the data, between 2016-2021 the global number of Internet users will rise from 32.5 billion to 51.6 billion people, and the global Internet prevalence rate will reach 65.6% in 2021. This growth trend will further drive the emergence of new industries such as online shopping, smart healthcare, these products will provide convenience to consumers, but will also have a profound impact on consumption patterns.

Overall, Chinas completion of the full tax reduction commitment under the Information Technology Agreement has not only benefited Chinas domestic economy, but has also had a positive impact on the global information technology industry and economic growth.