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China cuts tariffs again to boost consumer spending on local products

With its third tariff reduction in six months, China wants its citizens to buy avocados, cosmetics shoes, and other goods from home instead of abroad in efforts to nurture self-sustaining economic growth based on consumer spending instead of trade and investment. 

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Container trucks drive past the storage area at the Yangshan Deep Water Port, south of Shanghai on September 26, 2013. China announced a cut on import duties for goods such as refrigerators, cosmetics, and shoes, effective July 1, in efforts to boost domestic spending.

Carlos Barria/Reuters

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China is reducing import duties on washing machines, cosmetics, and some other consumer goods amid U.S. pressure to narrow its multibillion-dollar trade surplus.

The cabinet announcement Wednesday was the third tariff cut in six months on selected imports in what Beijing says is an effort to improve consumer choice and encourage domestic consumption.

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Import duties on washing machines and refrigerators will be cut from 20.5 percent to 8 percent, effective July 1, said the announcement carried by state television. Duties also will be cut on cosmetics, some drugs, shoes, and some other goods.

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Beijing is in the midst of talks with Washington on possible measures to narrow its trade surplus by increasing imports.

The US commerce secretary, Wilbur Ross, is due in Beijing this week for talks on details of China's promise in mid-May to buy more American goods.

China accounts for the bulk of global production of many of the goods covered by Wednesday's tariff cuts. The change would give foreign producers of high-end versions more access to the Chinese market.

Previous rounds of tariff cuts since November covered avocados, mineral water, baby carriages, and other high-value but low-volume imports.

Chinese leaders are in the midst of a marathon effort to nurture self-sustaining economic growth based on consumer spending instead of trade and investment.

Foreign products often are seen as higher quality, safer, or cheaper. That has fueled a spending boom by Chinese tourists on basic goods including shoes, cosmetics and infant formula.

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Economists say the changes also can help generate jobs in China by allowing consumers to buy higher-quality goods locally instead of when they travel abroad.

This story was reported by The Associated Press.