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By Du Xiaoli (chinadaily.com.cn)
Updated: 2007-07-05 14:43

Visitors chat at a textile exhibition in Shanghai earlier last month. Textile machinery is the first among the 16 key technical equipment fields to enjoy the policy of preferential duties on parts and components imports. [newsphoto]

China will carry out its policy of preferential duties on parts and components imports in 16 key technical equipment fields and the policy will be first implemented on textile machinery, according to the Ministry of Finance. The document on policy implementation details was released recently.

From January 1, 2007, China implemented rebates on importtariffs and value-added taxes for some key parts and components imported by domestic companies to develop and manufacture high-speed air-jet looms and automatic winders. The rebates were treated as national investment used mainly in product development and technological innovation.

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As part of the new policy, the country also abolished import tax exemptions on related whole machines. During the transition period, all automatic winders and air-jet looms will enjoy zero import tariffs from July 1, 2007.

The launch of the new policy signals that preferential import duties to revive domestic equipment manufacturing have entered substantial implementation. Policies of preferential duties on other equipment imports will be launched in succession.

As a basic industry, China's equipment manufacturing currently has many problems, such as the inability to innovate, high dependency on foreign products, unreasonable industrial structure and weak international competitiveness.

China's textile machinery sector has two tasks - the revival of textile equipment manufacturing and the promotion of textile industry upgrading during the11th Five-Year Program, according to the Ministry of Finance. The import duty adjustment aims at creating fair competition for textile machinery enterprises, it added.