Improving Export Tax Rebates And Resolving Worries And Worries

2008 is a tough juncture for the textile and garment industry.

As a major province of textile and garment export, Fujian's export growth in the first half of this year dropped 21.5 percentage points from the same period last year.

In the face of the sluggish textile and garment market, we expect the government to "save the market".

At the end of July, the Ministry of Finance and the State Administration of Taxation jointly announced that since August 1, 2008, the export rebate rate of some textiles and garments has increased from 11% to 13%.

Can the notice save the textile and garment industry from "fire and water"?

Fujian textile and garment exports showed negative growth

Influenced by such factors as acceleration of RMB appreciation, rising price of raw materials, rising labor costs and rising oil and electricity prices, textile and garment exports in labor-intensive industries have been greatly affected.

In August 3rd, the head of the national development and Reform Commission (NDRC) said that the first half of this year's textile industry has closed more than more than 10 thousand small and medium-sized enterprises in the first half of this year.

According to the data provided by Cao Xinyu, vice president of the China Textiles Import and Export Association, in the first half of June, China's textile and clothing exports decreased by 4.2% compared with the same period last year, of which clothing exports dropped by 15%.

Prior to that, a market survey conducted by the China Textile Industry Association showed that the average profit of 2/3 in textile industry of Jiangsu, Zhejiang, Shandong, Guangdong, Fujian and Hebei was only 0.62% this year, and the profit margin of other 1/3 enterprises was only hovering between 6%-10%.

Textiles are Fujian's second largest export commodities after mechanical and electrical products.

According to the data provided by Fuzhou customs to the newspaper, in the first half of the year, Fujian exported textile and clothing (including textile yarn, fabrics and products, clothing and accessories) to US $3 billion 420 million, an increase of 7% over the same period last year, and the growth rate dropped by 21.5 percentage points over the same period last year.

Among them, exports in June were 670 million US dollars, down 16.1%, and after February this year, there was another negative growth in exports.

There are indications that the export of textile and clothing has reached the stage of deep water.

Raising the tax rebate rate is difficult to save textile and clothing from "fire and water"

At the critical moment of the textile and clothing industry, the Ministry of Finance and the State Administration of Taxation suddenly announced that the export rebate rate of textiles and clothing increased by two percentage points.

"The export tax rebate rate rises, it feels like a long drought.

As soon as the policy came out, many customers told me that the order volume increased significantly.

Zheng Wu, general manager of Xincheng Chemical Fiber Co., Ltd., Changle, Fujian, thinks that the export tax rebate rate rises for the textile and garment industry that is struggling now. It is like sending snow to the sun. "For our chemical fiber industry, clothing is our downstream enterprise, the tax rebate is raised, the export pressure of downstream enterprises is relatively small, and their sales volume is large. As an upstream enterprise, we will naturally benefit from it."

The export tax rebate rate callback is 2 percentage points, equivalent to 2% of the total net profit of enterprises.

The impact of export tax rebate rate adjustment is mainly on general trade export enterprises, which has nothing to do with processing trade enterprises.

In the first half of this year, Fujian exported 2 billion 820 million dollars of textile and clothing in general trade mode.

The export tax rebate rate will be raised by 2%, equivalent to the total profit of Fujian textile and garment industry will increase by 56 million US dollars. According to the exchange rate of 1 yuan to 6.8 yuan, the profit of enterprises will increase by 380 million 800 thousand yuan, and the textile and clothing in the whole province will increase profits by 761 million 600 thousand yuan in one year.

While affirming that the export tax rebate rate will be beneficial to ease the cost pressure faced by the textile and garment industry, Wang Qiming, chairman of Haitian textile and light industry group, has changed his voice. "Although the export tax rebate rate has eased the pressure of survival, the situation has not been fundamentally improved, such as increased production costs, tight credit environment and weak external demand market.

Moreover, because of the weak bargaining power of domestic enterprises with low added value of products and the "bonus" arising from the increase in the export tax rebate rate, it is likely that foreign buyers will offset the paction price by increasing the export tax rebate.

Chairman Mao of the Fujian textile industry association also holds similar views. "This policy can bring some hope and vitality to the enterprises at the edge of life and death.

But now there are many pressures both inside and outside the enterprise, such as the price of raw materials is rising, the cost of labor and the exchange rate of RMB are still rising.

Therefore, enterprises will not improve as a result of raising the tax rebate rate of 2%.

In his view, the tax rebate rate increase is only symbolic, is a manifestation of the state's concern for the manufacturing industry, the tax rebate rate increase for enterprises, just got the "breathing" opportunity.

Fuzhou's customs officials have summed up the impact of the tax rebate rate in 8 words. He pointed out that the current textile and clothing exports are facing a series of severe tests: first, the whole industry is not able to resist risks.

Due to the lack of independent brands in the entire textile industry and the drop in external demand growth, the industry's ability to resist risks is low, which directly leads to weak bargaining power with foreign importers, and the rise of production costs can not be effectively pferred to the downstream. Under the pressure up and down, the overall profit level of the industry has been directly reduced. Meanwhile, with the strengthening of macroeconomic policy constraints and the increase of domestic production factor costs, the traditional advantages of Chinese enterprises are no longer obvious in competition with India and Vietnam, and some textile and garment orders are pferring to the above countries.

According to statistics from the US Department of Commerce, the volume of textile imports from the United States dropped by 10% over the first 4 months of this year, while the volume of textile trade imported from Vietnam increased by 31% over the same period last year.

Where is the way to save the market for textile and garment industry?

Since we simply expect to raise the export tax rebate rate to save textile and clothing in the "water and fire" road, what better way to save the market?

In Wang Qiming's view, "the most fundamental thing is to rely on the efforts of enterprises to pform, take the initiative to readjust the product mix, enhance the capability of independent innovation and the technological content of products, and increase investment in technological pformation and design and research and development.

In the final analysis, one is to make a brand, the two is to innovate in science and technology.

Only in this way can we get rid of the predicament of export textile and apparel getting worse and worse.

And if the enterprise develops capability