PR Resource – Muarateweh.net

China levies value-added taxes on most products, but refunds varying amounts of that tax on goods that are exported. The government usually adjusts the size of export tax rebates for different types of goods when it is trying to encourage or discourage growth in particular industries. It restored or increased VAT rebates to its exporters on 3,770 items on Dec. 1, according to the December issue of China Pulse, an online newsletter published by the U.S. Commercial Service, the Commerce Department’s export arm. The changes affect about 28 percent of China’s total exports, The new rebates for labor-intensive products such as luggage, footwear, hats, umbrellas, furniture, bedding products, lights, clocks and some electrical products, are 13 percent, up from 11 percent. The rebates on tires and some forest products rose to 9 percent, up from 5 percent, while the rebates for glassware increased to 11 percent, up from 5 percent. In addition, China eliminated export tariffs on certain types of steel, chemical and grain products and reduced export tariffs on some fertilizer and aluminum products, also effective Dec. 1. The changes are intended to boost China’s sagging exports.

The new policy marks a distinct reversal from actions taken last year. Until July 1, 2007, the VAT rebate was 8 to DZ percent on most exports. After that date, the rebates were dropped on 553 products deemed to be â€Å“resource- and energy-intensive and highly polluting,” such as fertilizers, leather and cement. The government also lowered the rebates on 2,268 products that “easily cause trade frictions,” including toys, apparel, furniture, paper and plastics. The new rebates on those products ranged from 5 to 11 percent.

Last year’s actions were designed in part to slow China’s blistering economic growth, which totaled about 12 percent in 2007. Rapid growth is seen as a prime cause of inflation. Growth this year is expected to fall to about 7 percent â€â€ not enough to provide employment for the millions of workers seeking jobs. Beijing fears that massive unemployment could lead to increased civil unrest. More information is available at http://www.export.gov/china/chinapulse/.

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Source: Shippingdigest