China : Lowered export rebate rates to be released this month

With major export tax rebate adjustments approaching, more than 40 chief categories of thousands of listed merchandise will encounter modifications, indicating a magnitude unprecedented.

It is noteworthy that electrical and mechanical products, which were encouraged by the government in the past, may also face a 4 percent drop, and some may be reduced to 8 percent in export tax rebate.

It is reported that although this program is still under argumentation of several ministries, it is expected to be released this month, and to be in effect by July 1.

A breakdown shows that export rebate rate of some electronic components, home appliances, and small machinery will be reduced from 13 percent to 9 percent; export rebates of some engineering machinery, digital control machinery, vehicles will be lowered from 17 percent and 13 percent to 9 percent.

In textile sector, rebate rate of plastic products, known as serious pollution commodities, will be adjusted from 13 percent to 5 percent.

Clothing tax rebate rate is expected to be cut by 2 percent, tax rebate rate of some chemical fiber fabrics will be reduced from 13 percent to 5 percent. Tax rebate rate of footwear will be lowered from 4-9 percent; rebate rate for raw hides and leather will be abolished or lowered.

Persistently high trade surplus is the direct cause that urges the government to adjust the export tax rebate rate.

In 2006, China's trade surplus reached US $177.5 billion, a record high. This year, exports are still booming. Customs statistics, released yesterday, show that China's exports from January to May reached $443.53 billion, an increase of 27.8 percent.

According to past practice, the second half of a year is the export peak season, based on this trend, many experts and agencies forecast China's trade surplus this year may easily break $250 billion.

As the exports of mechanical and electrical products account for nearly 60 percent of China's total export value, it can absolutely ease the trade surplus hypertension if the current adjustments are realized.
 
Fibre2fashion, News Desk - China