Beijing will increase tax rebates to help exporters
Beijing plans to raise export tax rebates to help struggling exporters, says a senior trade official.
Deputy Commerce Minister Zhong Shan was quoted by China Daily newspaper as saying that Beijing would 'at the appropriate time, increase tax rebates on specific categories of goods, including labour-intensive products'.
The ministry confirmed the report yesterday.
The move, which will be the first since mid-2009, will lower exporters' costs, as global demand declines amid the euro-zone's sovereign debt crisis and the economic malaise in the United States.
Zhong has yet to reveal details of the planned tax rebates, but exporters - particularly those in the clothing, furniture, shoes and toys businesses - welcomed the 'timely' measure.
They said the tax rebates would provide relief as orders from Europe and the US were dwindling and wages at mainland factories were soaring.
'It is very welcome indeed,' Pauline Ngan Po-ling, chairwoman of the Hong Kong Young Industrialist Council, said of the planned tax rebates. 'We are under huge pressure, particularly with soaring wages.'
Speaking at a trade conference in Jiangxi province on Monday, Zhong said Beijing would accelerate measures to help stabilise exports.
Last month, the mainland's exports and imports both fell for the first time in more than two years, although economists said year-on-year comparisons were skewed by this year's early Lunar New Year last month.
But for the next 15 years, China is expected to lead world trade growth with an annual expansion rate of 6.29 per cent, according to an HSBC report released yesterday. The bank also expects China to overtake the US as the world's biggest trading nation by 2016.
Indeed, the mainland's resilient economic growth and increased domestic consumption would continue to drive demand for commodities, consumer electronics, and cars, HSBC said.
And the yuan would account for up to 50 per cent of domestic trade settlement by 2015, it added.
Peter Kung, a senior KPMG partner for southern China, expects Beijing to help provide firms with greater access to financing.
According to HSBC, it now expects global trade to accelerate in 2014, a year ahead of its previous forecast.
Terence Chiu Man-chung, HSBC's head of trade and supply chain, said this was because euro-zone uncertainties were easing and orders from North America were recovering.
In the next five years, Asia-Pacific would enjoy a region-wide trade surplus as countries in the region would become net exporters across all trading categories, including food, manufacturing and energy, the HSBC report said.