China raises tax rebates to help exporters

CHINA will raise export tax rebates on some industries on November 1, the second hike in three months, to help struggling industries plagued by weaker global demand, the Ministry of Finance said today.

Tax rebates on shipments of textiles and garments will be increased to 14 percent. China last lifted the rebates by 2 percentage points to 13 percent on August 1.

The ministry also said that the rebate on exports of toys will be hiked to 14 percent from 11 percent now and that on furniture shipments will rise up to 13 percent from the current ceiling of 11 percent.

Rebates on exports of selected ceramic, plastics, mechanical, electrical and medicine products will also grow by 1 to 2 percentage points, according to the finance ministry.

The State Council, China’s Cabinet, said over the weekend that it would push forward policies to spur growth through measures including hiking tax rebates for exporters and cutting transaction fees of property transactions.

The moves were aimed at maintaining steady economic expansion and shielding the country from turmoil in the international markets, the government said. China’s economic growth was 9 percent in the third quarter, the slowest in five years.

China’s exports of garments reached US$87.1 billion in the first nine months of this year, up 1.8 percent year on year, according to Customs data. The growth clip was 21.2 percent points lower than a year before.

A rising yuan and increasing production costs also drove a lot of Chinese smaller toy producers out of business. A total of 3,631 toy exporters, or 52.7 percent of the industry’s total, were closed in the first seven months, according to the Customs.

Chinese Minister of Commerce Chen Deming said in September the government would help labor-intensive exporters to overcome difficulties they were facing as global demand faltered. Chen also encouraged them to upgrade their products to meet challenges.

Source: ChinaView

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