Chinese workers try to hoist steel wire rods at a steel products market in Shanghai, Aug 4, 2009. [Photo/IC]

China is to cancel its tax protection policy for certain types of imported steel, according to the Ministry of Finance, General Administration of Customs and State Administration of Taxation.

From July 31, tariffs and import taxes will be imposed on 78 products the domestic market is capable of producing, such as steel wire and electrical steel.

For orders signed before July 31 with goods to be shipped before year’s end, trading under the policy continues.

The policy was introduced to help boost foreign trade and attract foreign investment. The country needs to increase the use of domestic steel, said Xie Shuangqing, an analyst at Hua'An Futures.

Imported steel accounts for more than 6 million tons or nearly half the total national imports. Most is hot-rolled and cold-rolled steel coil.

"A large number of imported steels will lose their advantages over the cancellation of the tax protection policy, making domestic steel able to compete on an equal footing," said Xu Xiangchun, chief information officer of Mysteel.com.

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