Chinese government investigations
could lead to downturn in market
By Serge Lariviére
The recent soaring of fur prices and the large volume of importation going into China has led the Chinese government to launch several investigations into compliance to import laws and, most importantly, import fees and duties. In past year, Chinese officials found that some of the buyers of raw skins overseas were bypassing the official taxes and duties on imported goods, hence the loss of big money for the Chinese government. Such investigations even led to the arrest of one major fur broker in China, and now, all the major players in China are getting more nervous about buying fur and importing it back to China.
Some say the problem is an old issue, one that Chinese buyers have known about for a long time. But it is only with the recent climb in prices that government officials have decided it was worth the time and effort to assess what valuables were entering the country and claim the appropriate import tariff accordingly. Regardless of the reason, the investigation by the government and the associated claims, seizures of product and legal action all contribute to a cooling effect on buyers. Some fear that buyers might adjust by dropping the prices they are willing to pay to account for the new import tariffs. Others might choose to lower their spending to try to fly below the radar of government officials.
One thing is for sure — none of this is positive for trappers in the field. However, there is still much uncertainty about the actual effects. Some industry leaders believe that after the Chinese new year goes by — it falls on Feb. 5 this year — most Chinese buyers should be back in a good cash situation and ready for our wild fur. But the cloud of uncertainty still hangs overhead, and only time will tell what impact it will have.
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