3 December 2008

China ups export rebates

This article is excerpted from the 2 December 2008 edition of “The Journal of Commerce”.

China has restored or increased tax rebates to its exporters on 3,770 items, including labor-intensive, mechanical and electrical products, according to the U.S. Department of Commerce.

The rebate changes, which took effect Dec. 1, affect about 28 percent of China’s total exports, according to the December issue of China Pulse, an online newsletter published by the U.S. Commercial Service….

This was the third time this year that China has restored or increased rebates of the value-added tax on exports.

In addition, China eliminated export duties on certain types of steel, chemical and grain products and reduced export duties on some fertilizer products, also effective Dec. 1….

The changes are intended to boost China’s sagging exports. The new policy marks a distinct reversal from 2007 when the government eliminated rebates on 553 products deemed to be “resource- and energy-intensive and highly polluting,” such as fertilizers, leather and cement.

It also lowered rebates on 2,268 products that “easily cause trade frictions,” including toys, apparel, furniture, paper and plastics. The rebates on those products were reduced from 16 percent to 11 percent.

Those changes were designed to slow China’s blistering economy, which grew by about 12 percent last year. Growth this year is expected to fall to about 7 percent….