Support And Opposition Heated Debate: Should Textile Export Tax Rebates Be Raised?

After more than four months of research, the export tax rebate policy has finally come back to spring.

Recently, some media quoted authoritative sources, saying that the textile export tax rebate callback has made breakthrough progress, the decision-making department has passed this policy and will "wait for the opportunity to introduce".

Relevant information indicates that the final result will be seen in late July or early August.

However, in a contact with the industry and relevant officials and scholars, the Securities Daily found that there were mixed reactions from all walks of life to whether to continue to raise the export tax rebate.

Proponents argue that raising export rebates will not allow textile exporting enterprises to fall into "zero profits".

Opponents believe that the vast majority of China's textile enterprises are non export enterprises, for them, how to get preferential interest loans is the most urgent thing.

Huang Jian, director of the textile export department of the Ministry of foreign trade of the Ministry of Commerce, said that since the beginning of this year, many textile exporters did not dare to take long-term orders because of the rapid appreciation of the renminbi. Even 3 months' list did not dare to answer, "because it is very likely that there will be no profit when it is done."

Therefore, many enterprises are afraid to take orders from abroad, especially those who dare not take large orders, because it is difficult to grasp the exchange rate changes because of the long delay.

It is understood that in 12 large listed textile factories, there have been 9 companies in the situation of gross margin decline. In the first quarter of this year, the investment in cotton textile industry also showed negative growth for the first time.

According to statistics, this year, Jiangsu, Zhejiang, Shandong, Guangdong, Fujian, Hebei 6 provinces textile industry 2/3 of the enterprise profit margin is only 0.62%.

Wang Yu, vice president of the China Textiles Import and Export Chamber of Commerce, believes that the appreciation of RMB has a certain impact on the excipient industry. Due to this influence, raw material prices have generally soared and profits have not increased correspondingly.

Now, with RMB appreciation of one percentage point, textile export profits have declined to varying degrees.

In addition to the appreciation of the renminbi, the continuous increase in interest rates by the central bank has greatly increased the financing cost of textile enterprises, and some textile companies have been afraid to lend money to banks easily.

However, in terms of direct financing, because of the stock market downturn and restrictions on new stock issuance and the slowdown of refinancing, it is difficult for textile enterprises to raise funds from the stock market.

In addition, because of the sharp rise in electricity, freight, labor and water charges, the textile industry, whose gross profit margin was only around 10%, plunged into a "zero profit" dilemma.

Statistics show that there are more than 80 thousand textile enterprises in the mainland, of which 6.6 are small businesses.

In the first half of this year, news of closure or loss of textile enterprises came one after another.

It is understood that there are about more than 3000 textile enterprises in Zibo, Shandong. At present, about 30% of export orders have been pferred to neighboring countries.

If this situation continues, more than 100 thousand people are expected to be unemployed, and more than 60 of the 600 textile enterprises in a town in Jiangyin, Jiangsu, will be closed.

According to a recent survey by the American Chamber of Commerce in Shanghai, 17% of the corporate members intend to pfer their businesses in China to neighboring countries.

Seriously, if these textile enterprises are in a desperate situation, they will jeopardize the employment of 15 million people.

The labor intensive textile industry is an industry of the people's livelihood. There are about 20000000 workers in China's textile industry, 13 million of whom are migrant workers. If 2/3 of the enterprises fail, it will pose a great threat to social stability.

In addition, the national customs statistics show that the textile industry's clothing exports have slowed down for five consecutive months.

For textile enterprises, it is expected that the government will introduce some supporting policies as soon as possible to help them tide over the difficulties safely.

The staff of the Securities Department said: "domestic textile enterprises are facing the impact of multiple factors such as rising raw material prices, increasing labor costs, reducing export tax rebates and revaluation of RMB. It is also the same for our enterprises. According to statistics, these factors will bring 2 percentage points of net profit to our enterprises."

The Guangdong Academy of Social Sciences, enterprise management and decision-making science institute, Chang Lin said that the government can adjust tax policies and solve difficulties for enterprises through tax relief.

"Tax reduction policy is not enough for local governments to speak. It should start from the central government."

The newly established Ministry of information and industrialization has issued a letter of recommendation from the national development and Reform Commission, the Ministry of Commerce, the Ministry of finance, the China Textile Industry Association, the China Cotton Association and other trade associations and trade associations, aiming to solve the current difficulties faced by the domestic textile industry.

The contents of the letter are divided into five points: "the textile export tax rebate rate will be raised from 11% to 13%, and the export rebate rate will be adjusted from 11% to 15%". "Cotton import slip tax will be reduced to 570~357, equivalent to 5% from 3%", and "appropriate solution to the problems of textile and garment industry liquidity" three points are regarded as "life-saving straw" in the textile industry.

At the same time, "exemption from import tariffs of some textile machinery and automatic winding machines" and "measures to moderate the appreciation rate of RMB exchange rate" are also mentioned.

In this opinion letter, it can be roughly divided into two categories: core support policy and supporting policy.

Wang Qianjin, general manager of the first textile network, said: "on the exemption of import tariffs on some textile machinery, it means that many key machinery of many domestic textile enterprises were imported from abroad without duty. After the cancellation of the policy in 2007, the capital chain of enterprises was under pressure."

At present, the junctions of many contradictions in the industry are blocked by exports, so the key to solve the problem is to encourage enterprises to export.

In the survey of Securities Daily, textile enterprises generally believe that there are two ways to achieve this goal. One is to slow down the speed of RMB appreciation and stabilize market expectations; the two is to moderate the tax rebate rate of textile exports.

Qin Hong, an investment analyst in Bohai, said that the export tax rebate has made the export of textile industry difficult, and the continued appreciation of RMB has intensified this trend.

If the export tax rebate rate has been raised, it will inject new vitality into the development of the textile industry.

It is understood that since 2007, the state has gradually lowered the export tax rebate, and expanded the processing trade ban catalogue and other macro control policies. Almost the same period, the sub-prime mortgage crisis suddenly broke out, and Chinese textile enterprises suddenly fell into the double pressure of export tax rebate reduction and RMB appreciation.

According to the relevant departments, the range of textile and clothing callbacks is expected to vary, of which textile will be adjusted from 11% to 13%, while clothing will be adjusted from 11% to 15%.

The export tax rebate rate is adjusted by one percentage point, and the total amount of 1% of the total export of the enterprises will directly form the profits of the enterprises.

The head of a textile enterprise in China said, "we have been looking forward to this policy for a long time."

He said that from the present point of view, the export tax rebate adjustment is the most direct means of supporting enterprises in the current support policies.

"At present, the profit of the textile industry is only 1%. If the export tax rebate for textile and clothing can be raised by 2%-4%, that means that the company will earn more 2%-4% gross profit, which is very important for us at the moment."

Lu Tai A is a textile enterprise mainly producing yarn dyed fabrics. More than 80% of its products are exported to overseas countries, and Europe and America are the main export areas.

According to Zheng Weiyin, the representative of Lu Tai A securities, told our reporter: "our company can earn $4 hundred million in foreign exchange earning a year, and if the textile export tax rebate rate can be raised to 2%, it means that the gross profit margin of our enterprises may increase by 2 percentage points."

The export of products also reaches more than 80% of the shares, and according to the staff of the Securities Department of the company, "if the export tax rebate rate is raised by 2%, the net profit of the company will increase by 1 to 2 percentage points."

Wang Jingang, director of stock exchange of Fu Tian, said: "the main business of our company is home textiles. At present, it is not known whether it belongs to textiles or clothing. However, if we want to make up for the adverse impact of rising costs and other adverse factors on enterprises, it is not enough to raise 2 percentage points, and it is almost 6 percentage points."

According to the statistics of the first textile network, the total export volume of domestic textile and apparel in 2007 was 167 billion 900 million US dollars, of which 70% of general trade accounted for 70%. According to the annual export growth of 10%, the total export volume of textiles and clothing could reach 184 billion 700 million in 2008, and the total export volume of general trade could reach about US $130 billion.

Assuming that the tax rebate policy will be implemented in July 1st, if the export tax rebate rate is adjusted by 2 percentage points, the total profit of the textile industry will increase by 2 billion 600 million US dollars. According to the exchange rate of 6.8, the profit of enterprises will increase by 17 billion 690 million yuan.

Without considering other factors, the implementation of the 25% income tax in enterprises will increase the net profit of the textile industry by about 13 billion 229 million yuan because of the export tax rebate adjustment, which accounts for about 11.4% of the total profits of Enterprises above the textile scale in 2007.

The introduction of textile export tax rebate policy can be described as twists and turns, but the final market argument still comes to the conclusion that this policy will be introduced.

On the afternoon of July 3rd, the president of the China Textile Industry Association told the finance and Economic Commission that the core content was "to win more policies for the textile industry".

Later, there was news that the high level expressed support for the proposal and considered the above export tax rebate to support it.

In an interview with some of the listed companies in the textile industry, our reporter learned that the export oriented textile enterprises were anxiously awaiting the introduction of the export tax rebate.

The first textile network Wang said that for the struggling textile enterprises, there should be a distinction in the formulation of supporting policies, that is, a short term emergency policy that has strong pertinence and can help enterprises survive the survival threshold, such as raising the export tax rebate and so on, adjusting and upgrading certain buffer time for enterprises, and promoting a long-term mechanism for promoting the pformation and upgrading of the textile industry.

Long term problems should be solved by long-term means. To solve the outstanding problems existing in the textile industry, it is no doubt how to determine the intensity and timing of the tax rebate policy. He thinks: "half a year's data is enough to reflect the trend of a whole year. Therefore, in the light of all aspects, July should be a good time to adjust the export tax rebate policy."

Industry analysts believe that if the exchange rate tends to be stable, the pressure of the export tax rebate policy will be much smaller.

To some extent, the speed of RMB appreciation has become a weathervane to observe the adjustment of export tax rebate policy.

Textile enterprises are anxious and anxious about the timing of the textile export tax rebate policy. "We have also heard that the export tax rebate policy may come out," said Wang Jin Gang, a manager of the Japanese government. "We have heard that the time for the introduction of the export tax rebate policy is coming to August. If it is delayed by other things, even if the policy is introduced, it will not have much effect on the income of the second half of 2008."

Lu Tai A securities representative Zheng Weiyin said: "when there is uncertainty, but the introduction of export tax rebate time has a great impact on the company's performance in 2008."

In this regard,

The export situation has been restored since March, and the Olympic Games have affected the supply of raw materials and twisted the supply and demand of raw materials. It is best to wait until October when the export figures are released in September.

In addition, some textile enterprises are calm in supporting policies of the government.

They said they would not blindly accept orders before the policy was formally introduced.

When we finished the deadline, we got the latest news. The export tax refund plan for the Ministry of industry and information technology needs to be approved by the State Council.