China Daily:

China should end smartphone subsidies to overseas vendors and give more support to local brands, industry insiders said on Tuesday, as telecom carriers pledged to cut operating expenses and Apple Inc gets ready to debut its next-generation iPhone.

Xiang Ligang, a telecom researcher in Beijing, said cutting carriers’ subsidies to foreign-made handsets will not only reduce carriers’ operating expense but also leave local players with more market demand.

The perception is that buyers of high end phones are price insensitive and will buy the phones even without the subsidies.

China Mobile Ltd, the nation’s largest telecom carrier by subscribers, said it plans to cut about 5 billion yuan in subsidies this year as a part of its 20 billion yuan operating expense reduction campaign. The company paid smartphone makers more than 26 billion yuan in subsidies in 2013.

“Giving subsidies to high-end phones made by Samsung and Apple does not make any sense because buyers in this category are not price-sensitive,” Xiang said. “In other words, they will buy a 5,000 yuan smartphone even if there is no discount.”

That last point may well be true for buyers at the top of the market, but it will certainly have an effect on mid and low end buyers. This amounts to a foreign goods tariff.