What impact will the tariff cuts have on China's auto sector? And who will benefit the most from the policy change? Lily Lyu has the details.

Foreign carmakers are among the main beneficiaries of the tariff cuts. China is the world's largest auto market, with sales rising to about 24 million in 2017. A potentially huge demand for foreign cars by Chinese consumers could boost the job markets and workers' income in those countries.

LIU SHANGXI, DIRECTOR CHINESE ACADEMY OF FISCAL SCIENCES "From a global perspective, the tariff reduction will have a direct and positive impact on overseas car exporters. The policy shift will also help promote economic growth and lower unemployment rate on a global scale."

Opening doors wider to foreign competitors is in line with the Chinese government's efforts to deepen its reform and opening up efforts. The global auto sector is undergoing a transformation that's marked by close integration with a fresh generation of IT technology, new material and green energy. China's auto industry is facing some daunting challenges, including accelerating restructuring and innovation, despite its explosive growth in the past decade.

LIU SHANGXI, DIRECTOR CHINESE ACADEMY OF FISCAL SCIENCES "Competition will become more fierce because of the tariff cuts. Under such circumstances, it can actually achieve a catfish effect, that our domestic automakers, including domestic car brands, will accelerate their pace of restructuring and upgrading. And thereby it will promote supply-side reforms in the auto sector."

Lower import duties mean lower VATs and consumption taxes. Chinese consumers are expecting that the tariff cuts can push down car prices. But analysts say a car's retail price depends on a variety of factors. The most important one being the manufacturer's suggested retail price. Market dynamics will also decide how much a car's retail price will fluctuate.