The government will eliminate or cut tax rebates for more than 2,800 export
items from July 1 - in the boldest move yet to rein in exports since it joined
the World Trade Organization in 2001.
The affected items account for 37 percent of all export products, the
Ministry of Finance announced yesterday.
Export tax rebates for 553 "highly energy-consuming and resource-intensive"
products, such as cement, fertilizer and non-ferrous metals, will be eliminated,
the ministry said.
Rebates for another 2,268 products, described as "easy to trigger trade
frictions", will be slashed from 8-17 percent to 5-11 percent. They include
garments, toys, steel products and motorcycles.
announcement follows the imposition or raising of export tariffs on 142
categories of goods effective June 1. The products include steel billets and
non-ferrous metal minerals.
Both steps are part of the policy package designed to control soaring exports
and bloating trade surplus.
From January to May, exports surged 27.8 percent year-on-year to $443.5
billion; and the trade surplus rocketed 83.1 percent to $85.7 billion, according
to Customs statistics.
The huge surplus has aggravated such problems as trade conflicts with other
countries and pressures on China to revalue the renminbi, as well as excessive
liquidity at home, the ministry said.
Liu Xueqin, a researcher with the Chinese Academy of International Trade and
Economic Cooperation affiliated to the Ministry of Commerce, said: "The new
policy will restrain exports because it affects a broad range of products."
Domestic producers say they are already feeling the pressure from the export
"Our steel companies are at threat (of losing foreign markets). But we can
understand the overall significance of the policy," Qi Xiangdong, deputy
secretary general of the China Iron & Steel Association, told China Daily.
The association predicted earlier that, as a result of the export
disincentives, the country - the world's top steel producer - would this year
export no more or even less than last year.
Steel exports totaled 43 million tons in 2006, a growth of 110 percent over
The finance ministry said the new policy will also help slow down investment
in fixed assets and reduce over-capacity; and lead to sustainable development.
Many industrial sectors, such as steel, cement and
motorcycles, are believed to have excessive production capacity in relation to