The Impact of Tariff Policies on Imports of China’s Intermediate Goods

China has witnessed a substantial increase in imported intermediate goods in recent years. To a great extent, this can be attributed to China’s tariff policies. We explore the impact of tariff reductions on intermediate products, the implementation of a ladder‐shaped, cascading tariff structure, and China’s policy of encouraging processing trade. Our analysis suggests that China’s tariff policies affect her export ability, the scale of foreign direct investment (FDI) and the growth of Gross Domestic Product (GDP).