Export taxes on steel and other metals to rise
Beijing will raise export taxes from June 1 on 142 products, including steel and some nonferrous metals and cut import tariffs on 209 types of goods, including coal and fuel oil, to rein in the growing trade surplus.
The move is also aimed at reducing the country's reliance on polluting and natural resource-diminishing industries.
The announcement comes ahead of a dialogue this week in Washington between Vice-Premier Wu Yi and United States Treasury Secretary Henry Paulson, in which the trade imbalance between the two countries is set to be a key issue.
The government will impose a 5 to 10 per cent tax on exports of more than 80 types of high-value-added steel products, including wire rods, steel sheet and strips and raise the tax by five percentages points, to 15 per cent, for exports of low-end steel products, such as pig iron, billets, steel slabs and ingots, the Ministry of Finance said yesterday.
Chinese officials are scheduled next month to meet major steel trading partners separately, including Japan, South Korea and the European Union, in which the issue of its soaring steel exports will be discussed.
Beijing's latest round of measures to curb steel exports was expected after the country's steel exports surged 132 per cent to 21.28 million tonnes in the first four months of this year, said DBS Vickers metals and mining analyst Helen Wang.
The new taxes, the third set since last year, were 'aimed at reducing exports of energy-consuming, polluting and resource-intensive products', the ministry said.
A 5 to 15 per cent export tax would be applied to nickel, lead, tungsten and zinc, the Finance Ministry said.
The government removed export rebates on most steel products from April 15, and cut rebates on high-value-added steel products to 5 per cent.
The ministry also said it had set a temporarily lower rate of tariffs on imports of 209 types of goods.
The temporary import duties for fuel oil, softwood and coal are between zero and 3 per cent, while components for making electronic appliances such as televisions and air-conditioners are subject to a tariff of between 2 and 6 per cent. Building materials, home appliances, and baby food duties are set between 6 and 17 per cent.
The ministry did not say how long the rates would remain in effect.
Ms Wang said the new taxes on steel would not have much impact on her positive view of the industry in the mainland, or the earnings of Hong Kong-listed producers.
The number of products that will be subject to export tax increases: 142