Top Biz News

Government plans export tax rebate cuts

By Jiang Wei (China Daily)
Updated: 2006-06-08 08:57

He added that, theoretically, the cuts would also reduce the total volume of China's exports or slow down their growth rate.

The increasing growth in exports is considered the root of China's trade imbalances with major trade partners.

"Its impact will vary from industry to industry," Li said.

Some textile exporters have begun to complain that the possible cuts would further squeeze their profits.

Experts predict the move will hurt certain textile exporters, in particular those that focus on low value-added products.

"The average gross profit rate in the sector is a mere 3 to 4 per cent.

"The new move might force some factories to shut down, but it will also force most of them to improve," said an insider in the textile industry who declined to give his name.

China has long granted rebates on value-added tax for some exports.

For copper, zinc and tin, exporters can claim 5 per cent of the export price as a rebate, down from 13 per cent two years ago.

Export tax rebates for other items, such as salt, silicon and molybdenum ore, have been scrapped.