China to lower tax rebate for textile exports
16/04/2007
The Chinese government is preparing to cut the export tax rebate on textile products in order to help to balance the country's trade surplus. Reports indicate that the rebate rate on textile products, covering the cotton textile and chemical fibre sectors, could fall from 11% to 9%, the rate on garments may be reduced from 13% to 9%, and the rebate on chemical fibre products could be cut from 9% to 5%.
The China National Textile Industry Council has lobbied to maintain the original rebate rate on textile products and reduce the rate on garments to 11%, claiming it would prevent fluctuations in exports. The government has adjusted the rebate rate on textile products and garments four times since 2001.
It is estimated the growth in garment exports would fall from 25% to 10% if the rebate rate was cut by 2%. This would reduce exporters’ revenues by $1.6 billion, given that the 2007 growth rate for garment exports is likely to be around 15%.
The
Vice Commerce Minister Gao Hucheng said that the government would decide whether to readjust export rebates in accordance with market changes.
Customs sources estimated that Chinese exports of garments and textiles totalled $143.99 billion in 2007, a growth of 25.2%, while imports totalled $18.09, up 5.6%. The country's trade surplus soared to $46.44 billion in the first quarter of 2007, although it dropped to just $6.87 billion in March—less than a third of the February figure.
Share this story:
