China to adjust export tax rebate policy to balance trade effective July 1 - MOF

Beijing. June 20. INTERFAX-CHINA - China will adjust its export tax rebate policy on July 1 in order to rebalance trade, the country's Ministry of Finance announced yesterday.

The adjustment is being made in order to exert further control over China's runaway export growth, to rein in its foreign trade surplus, prohibit the export of high energy-consuming and polluting products and ease trade frictions between the country and its trading partners.

The adjustment will affect 2831 products, or 37 percent of the total items listed in China's customs tax regulations.

Export tax rebates will be eliminated for 533 products that require energy-intensive or environmentally damaging manufacturing, including salt, cement, fertilizer, metal carbide, leather, wood products and products derived from endangered animals and plants.

Export tax rebates will also be lowered on 2268 products that are likely to cause friction between China and its trading partners, such as clothes, shoes, caps, bags, toys, plant oil, plastics and furniture as well as various metal and iron products.

The structure of the export tax rebate system will also be adjusted, with the second lowest rebate rate to be raised from its current 8 percent to 9 percent. In full, the adjusted rebate levels will be 17 percent, 13 percent, 11 percent and 9 percent and 5 percent.

However, export taxes will be removed from 10 products, including peanuts, oil paintings, carved and decorative boards, stamps and fiscal stamps.

As there will be no transitional period for the adjustment, the government has announced the revised policy in advance so that enterprises can prepare for the new regulations.

According to a senior MOF official, China's soaring trade surplus has increased domestic liquidity and put upward pressure on the country's currency.

He said that in the long term, the changes made to the export tax rebate policy will help to accelerate the country's economic transformation and maintain sustainable development.

According to the General Administration of Customs, China's trade surplus for the January to May period stands at $85.72 billion. During that period, exports expanded by 27.8 percent year-on-year to reach $443.53 billion, while imports grew 19.1 percent to $357.81 billion.


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