Export tax rebates for most commodities may be adjusted back to 17%, and export policies will be extended
On November 13, an informed official told this reporter that this time the export tax rebate list was jointly agreed upon by the Ministry of Commerce and the Ministry of Finance, and the basic idea was to “return 17%.” But he also said that the products adjusted this time are only part of the products, and there are still some products that still have room for improvement.
Previous to November 12, the State Council executive meeting announced that on the basis of the two increases in export tax rebate rates in the second half of this year, starting from December 1, 2019, further increases will be made for some labor-intensive products, mechanical and electrical products and Export tax rebate rates for other heavily affected products. At the same time, export tariffs on some steel products, chemicals and grains were cancelled, export tariffs on some fertilizers were reduced and taxation methods were adjusted, and export tariffs were levied or increased on individual products to strongly support export growth. This adjustment involves a total of 3,770 products, accounting for approximately 27.9% of all export products.
On the 13th, Zhang Xiaoqiang, deputy director of the National Development and Reform Commission, told this reporter that various ministries and commissions are jointly studying policies for import and export tax adjustments to maintain stable export growth. In addition to import and export taxes, there are also a series of policies to support export enterprises, especially small and medium-sized enterprises, under discussion.
Labor-intensive products are still the focus
As of the press time of this reporter, the Ministry of Finance and the State Administration of Taxation have not announced the list of export tax rebate adjustments. However, the aforementioned officials said that the list is still dominated by labor-intensive products, with light textile products occupying an important position.
This is the third time that China has increased export tax rebates in the second half of this year, the only increase in 10 years.
On October 21, China announced a one-time increase in export tax rebates for 3,486 items. The Ministry of Commerce once required its affiliated chambers of commerce to urgently report analysis of the export situation of relevant commodities and relevant policy recommendations, and “raised it back to 17%”, which appeared in almost every chamber of commerce’s proposal.
In accordance with international practice, export tax rebates are designed to solve the problem of double taxation of goods in the exporting country and the importing country. Therefore, almost all countries regard it as a neutral trade policy and implement the management method of “all levies, all withdrawals”. However, in China, export tax rebates have always been used as a means to suppress or stimulate exports.
“When we conducted research at the Canton Fair, what companies mentioned most was that the export tax rebate would be adjusted back to 17%.” Shen Danyang, deputy director of the Research Institute of the Ministry of Commerce, said.
“The current export situation cannot be saved without saving it, and it is already too late for the government to take action.” Zhang Yansheng, director of the Institute of Foreign Economics at the National Development and Reform Commission Research Institute, said: “The impact of the financial crisis on China’s exports has begun to appear in September and October.”
The Chinese government once raised the textile and clothing export tax rebate from 11% to 13% in July. However, subsequent surveys by various ministries and research institutions found that because the profits at the two points require foreign customers, trading companies, and production enterprises Amortized, very little profit ultimately goes into the production enterprise. Therefore, in October China announced that it would continue to increase the price of textile and clothing products from 13% to 14%.
The aforementioned official stated that according to the previously discussed plan, the export tax rebate for textile and apparel will be adjusted back to 17%.
In terms of mechanical and electrical products, which account for half of China’s exports, some large machinery and their parts, and electronic information product parts are expected to be adjusted to 17%.
“The adjustment of the export tax rebate policy is relatively easy to implement, and its methods and mechanisms are fixed and easy to operate.” Shen Danyang said: “At the same time, since it is an international practice to refund all export tax rebates, the Chinese government will only restore the tax rebates that were previously suppressed. It is not a direct subsidy to exports, and it can also avoid corresponding international disputes.”
Credit fiscal support policy is to be released
Although some scholars have repeatedly called for China’s economy to shift from over-reliance on exports to stimulating domestic demand. But Zhang Yansheng said: “This is an extraordinary period. If there are large-scale bankruptcies and unemployment, it may affect the macro economy.
In addition, according to Zhang Xiaoqiang, a series of measures to maintain export stability are still under study, including increasing financing support for small and medium-sized enterprises.
An official from the China Chamber of Commerce for Import and Export of Machinery and Electronics told this reporter that the Chamber of Commerce has just convened a forum with relevant companies in the industry to understand the companies’ suggestions for the next policy direction. In addition to export tax rebate adjustments, the company’s suggestions also include: Stabilization RMB exchange rate, improving the foreign exchange settlement system, expanding domestic demand, lowering interest rates, etc.
The fiscal policy for foreign trade that may be introduced in the near future is that the central government will further increase the scale and intensity of export credit, export credit insurance, and foreign trade development funds.
According to the current process, export credit is issued by the Export-Import Bank, export credit insurance is underwritten by China Export and Credit Insurance Corporation, and the foreign trade development fund is controlled by the Ministry of Commerce and is used for corporate information services, exhibitions, training, domestic and foreign Support for enterprises to connect and expand into new markets.
Due to the breakage or bankruptcy of foreign companies’ capital chains, the number of overseas bad debts encountered by Chinese companies has increased sharply this year. Richard Bi, managing director of Coface Greater China, an international export credit insurance company, told this newspaper that the corporate debt index from January to September this year increased by 36% compared with the same period last year. In mainland China, companies with financial problems include: Furniture, Jewelry, Watches��Toys, consumer electronics, paper printing and other industries.
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