Reports indicate that China is to cut export rebates for more than one-third of its export segments—more than 2,000 product types—in an attempt to reduce accumulated stocks of certain items. Rebates for apparel, footwear and bags will be reduced, while leather export rebates will be cancelled entirely, effective July 1.

A government statement suggested that prices for these items are likely to increase, which should curb the “rapid increase” of exports. It added that, although this would impact upon low value-added, low technology products, the majority of exports will be largely unaffected.
The government is also encouraging an increase in domestic demand for these products in order to help control export figures. As a result of the value of the Chinese currency, export prices have decreased, while export volume increased by almost 28% in the first quarter, ahead of import growth.