The Chinese government will adjust export tax rebate as from July 1st.

The industries involved in this adjustment include: Propagation, Minerals, Chemicals and Industrial Products, Plastics and Rubber Products, Peltry and Leather Products, Wood products, Adhesives and steel and iron products.

It is reported that the export tax rebate for most of chemical industry product and other related industrial products may be cancelled, and the export tax rebate for the rests of these products will be reduced from 13% to 9% (or 5%).

Another rumor is that the export tax rebate for methanol, Acetic Acid and other Acetic Acid derivatives may be reduced from 13% to 5%.

Due to export tax adjustments, some export companies will defer their export plan until the formal documents and policy are confirmed.

Paper Products Export Tax Rebate is being reduced by 8% from 13% to 5%.

Plastic Products Export Tax Rebate is being reduced by 6% from 13% to 7%


What does all this mean?


Export Tax Rebates is what Trading companies and/or Manufacturers can claim back from the government when they export. The majority of manufacturers take this rebate into account when they cost their goods.


In a Nutshell.

These goods effected by this decrease in the rebate will RISE in price after July 1st.

Replying to [moppet]

It is a bit wierd that this new policy comes as a surprise to even the Chinese exporters themselves.

I have one supplier who was notified of a drop from 13% to 5% on the rebate..and now he was notified that it is a drop from 13% to 11%.

So..this seems to be more of a process than a decision.

Replying to [grigo]: Do you know the export rebate on wood products, wood doors and cabinets to be exact?

Replying to [grigo]:

Almost all chemicals & dyestuffs are covered in the cancelled list & tax rebate on these items w.e.f 1st July'07 is nil or negligible .

Cut in the tax rebate rate is certain to impact their cost & price rise from 1st July is imminent .

RMB should further appreciate against the dollar which will make the imports in China more cheaper. This will compensate the price increase to an extent .

Replying to [grigo]:

good article and i heard this will become true.i am in upholstery fabric,hometextile products line,so i don't whether ours export rebate will be down or not.

Replying to [kapila]:

i think the govenment want to balance their import and export,and ajust their economy.

Replying to [grigo]:
There is something wrong with our recent export, when our government claim “drop in export tax rebates”. The shipment companies raise more the double shipping price than ever by this chance. Some companies had booked the container from the shipping companies before be cancelled because they wanted to get more profits. How unreliable they are!

Replying to [grigo]:
please !! nonononnononononononononononononono

Most comments are kinda naive. China has so much foreign reserve now and it decided that the environment, labour welfare, sustainable growth etc are more important than earning USD. Industries like garment, leather etc are of very little use to the country. It is actually encouraging importers to buy from other countries the cheap and unbranded products.

Chinese companies in general has been very short sighted. The only way they compete is cut-throat price war. That only benefits overseas buyers. For example, there are only 3 micro-wave makers in China but instead of forming a cartel they went into endless price war. Many foreign buyers have teased the Chinese of such stupidities. The Chinese always offered them price reductions that they did not ask for. This has to stop.

Replying to [cqfury]:

Well done!
The foreign customers now request the unreasonable price from Chinese suppliers. I had met many buyers, they will give me a target price which is much lower than my quotation. when I said that it was hard to accept the target price, the buyer will very amazed upon my feedback, then they will bring a quotation sheet from supplier elsewhere and asked me: Why they can make the product at this price and you can't? Why?

Replying to [grigo]:I think it will be better if the government help the basic industries & as some products are very cheap in china so they have most of world market.If the government help these industries it will increase sale by exporting more bringing more foreign exchane & this will increase the country income & finally it will result in better life for its people.The raw materials related to Agriculture industry should be helped by the govt: