The Impact Analysis Of China's Tariff Reduction On Domestic Automobile Industry

President Xi Jinping defined China's import strategy of actively expanding imports and promoting trade balance at the BOAO Forum on April 10,2018.From July 1,2018,China began to reduce import tariffs on automobile products.Based on the above background and the current overall market environment of China's automobile industry,this paper focuses on the possible economic impact of the import tariffs reduction on automobile products of domestic and foreign automobile manufacturers and consumers of complete automobiles and spare parts from two aspects of theoretical mechanism and quantitative evaluation.Based on this,it analyzes the possible countermeasures of various departments in the automobile industry,and finally puts forward the strategic thinking of automobile product import suitable for the development of China's automobile industry.In this paper,the WITS-SMART model of the World Bank and GTAP model developed by Purdue University in the United States are used to quantitatively simulate and predict tariff reduction from local equilibrium and general equilibrium respectively.The simulation results show that in the short term,the tariff reduction will have obvious positive trade effect and tariff effect.The total trade effect of the tariff reduction for whole vehicles is 5.533 billion US dollars,and the total trade effect of the tariff reduction for spare parts is 1.109 billion US dollars.The 15 major automobile producing countries can increase the export amount to China by 6.5 billion US dollars through the tariff reduction for Chinese automobile products.In the long run,the reduction of China's automobile tariffs will greatly increase the welfare of Chinese consumers,thus stimulating domestic consumers' demand for imported automobiles and promoting China's overall import and export development.Although the tariff reduction of China's auto products will make China's nominal GDP decline,China's real GDP has slightly increased.The reduction of import tariffs on Chinese auto products will have a certain impact on the production and import and export trade of China's auto industry.If the tariff is reduced by 50%,the output growth rate of China's auto industry will decline by 2.49 percentage points.If the tariff is completely zero,the decline in the output growth rate of the auto industry will expand to 4.97 percentage points,close to 5 percentage points.Considering the import and export of automobiles,a 50% reduction in automobile tariffs and the realization of zero tariffs will lead to deterioration in the cross-border trade balance of Chinese automobile products,with the deterioration reaching US $3.248 billion and US $ 6.496 billion respectively.