China's Myriad Customs Regimes and Their Implications for Openness (with Reference to Steel Imports)

The aim of this paper is to provide an institutional outline of China's various Customs regimes. According to recent data, only approximately one-third of China's imports were subject to "ordinary" rates of duty and to "ordinary" non-tariff barriers, rules and regulations. A large proportion of merchandise imports are exempt from "ordinary" or "normal" requirements. These exemptions come into play when the importers can demonstrate that the imported goods are sourced from particular countries or locations, or will be used for prescribed purposes (most notably, export processing and capital goods imports). Although such institutional arrangements are common to many countries, the degree and extent of their application in China is seemingly without parallel. The importance of these arrangements in China's case holds qualitative implications for how China's trade policy should be viewed, and also for assessments of China's "openness" to foreign trade. In the present paper, the impact of the various regimes is illustrated with reference to their affect on imports of iron and steel products into the Chinese mainland.