Import tax load is an important parameter for foreign companies to decide wether to enter a foreign market or not. Often used to protect the national economic sectors, is also has to be seen as an critical parameter in the competition between the BRIC states for new technologies and investors.
Recently China announced (article), that it intends to reduce the import tax level for several high tech products to open the markets for worldwide investors. Named reasons were
- a reduction of the critical export dependence
- a massiv support for the domestic demand (chinese households deliver only 35% of the GDP in 2009)
To the contrary, some weeks ago, the Brazilian secretary of trade announced, that it is intended to increase import taxes in Brazil for luxury goods to 35%.
How will the chinese regulatory changes affect the behaviour of the other BRIC states, namely Brazil?