Textile Industry "Save The Market" The First Step, The Export Tax Rebate Rate Part Callback 2%

At 1 noon on July 31st, a piece of news was posted on the website of the Ministry of Finance: the Ministry of Finance and State Administration of Taxation on adjusting the export tax rebate rate of some textiles and garments.

The notice said that from the next day, the export rebate rate of some textile and clothing products will be raised from 11% to 13%.

Although the relevant news has been spreading for many months in the industry, the specific adjustment time has been kept highly confidential.

The leaders of the textile industry association, which represents the textile industry to make policy recommendations to the government, told our correspondent that he did not see the notice in the afternoon.

Even large enterprises with good government relations receive information two hours in advance.

According to our reporter's understanding, the product is adjusted across almost all exports of textile and clothing products.

According to the preliminary estimate, the adjustment will bring about 10 billion yuan profit to the textile industry.

People close to the government told reporters that the export tax rebate rate is the first step for the state to support the textile industry policy. It is expected that there will be some policies in the second half of this year.

In terms of export tax rebate rate, some textile and clothing products encouraged by the state may still have room for improvement.

The products included include the 12 chapter of the customs tariff code, which covers almost all products.

The Ministry of Finance and the State Administration of Taxation Notice that since August 1st, the new export tax rebate rate has been officially implemented.

Since the beginning of this year, the profits of textile industry have declined sharply due to many factors, such as RMB appreciation, raw material price increase and labor cost rising.

According to statistics of the NDRC's Economic Operation Bureau, in 2008 1-5, the gross loss of the textile industry amounted to 9 billion 958 million yuan, a substantial increase of 2 billion 972 million yuan compared with the same period last year, an increase of 42.54% over the same period last year.

To this end, the textile industry has lobbied government departments to raise the export tax rebate rate and a series of measures to save the market. Otherwise, once the industry is shut down or bankrupted, it may have an adverse impact on employment.

Among them, the China Textile Industry Association put forward the hope that textile export tax rebate rate increased two points to 13%, clothing export tax rebate rate increased two points to 15%.

The China Textile Import and Export Chamber of Commerce has proposed that it is best to maintain the textile and garment industry, and the export rebate rate will be raised to 17%.

After several months of intensive research and discussion, the Ministry of Finance and the State Administration of Taxation finally set the adjustment level up by two points.

Before that, viscose fibers, which were widely concerned in the industry, have been rumoured that the export rebate rate will be substantially adjusted to 10 points to 15%.

However, judging from the revised list released by the Ministry of finance, viscose fiber has not been included this time.

"We have made relevant policy recommendations to the state."

In July 31st, Tian Ke, Secretary General of the viscose branch of the textile industry association, told our reporter that he was checking the tax list one by one to see whether viscose fibers were included in the chemical fiber products.

He said that due to a series of factors such as RMB appreciation and export tax rebate, China's viscose fiber exports fell by half in the first half.

"Viscose fiber is the only product of textile and garment industry that is classified into two categories and one category."

Wang Jin said: "viscose fiber production process may cause some pollution, and at the same time energy consumption is relatively high, which is not included in the export tax rebate rate is an important reason for callback."

"This adjustment is certainly good for the industry in the short term, but there is no way to fundamentally solve the difficulties faced by the textile industry."

Shi Hongmei, an analyst at Orient Securities, said.

Lin Shu, executive deputy general manager of Qingdao Textile General Corporation, agrees with the statement: "the export rebate rate is raised by two points. Immediately, foreign businessmen will ask for the adjustment of product prices. Therefore, at least 0.5 to 1 points of profits will be apportioned to foreign purchasers. The benefits of actual domestic enterprises are only one point, which is not enough to solve the current difficulties of enterprises".

Lin learned that the export situation in the second half of the year is also not optimistic from the perspective of enterprise orders.

As foreign purchases are completely unacceptable, some of the orders are flowing to Southeast Asia, South Asia and other places.

Such enterprises can not guarantee the market, there is no room for product and technological innovation.

The expectations of enterprises for national support policies include: reducing cotton sliding tax to reduce the cost of cotton production.

In June, under the appeal of textile enterprises, the Ministry of Finance announced that from June 5, 2008 to October 5th, the cotton slip tax on imports imported from quota quotas fell from original 5%-40% to 3%-40%.

But Lin learned that such strength is not enough.

"The two point of the export tax rebate rate adjustment is only the first step in supporting policy adjustment, which is equivalent to giving the enterprise a positive signal to alleviate the current export pressure to a certain extent."

The foregoing insider told our reporter that the supporting policies that may be introduced in the second half of the year include: automatic winder and air-jet loom duty free import, cotton sliding tax adjustment.

In addition, many textile and garment enterprises may also enjoy the support policies provided by the state to small and medium-sized enterprises.

"The next adjustment may accelerate the differentiation of products in the industry and tilt towards some of the terminal products."

The source said.

Prior to this, Cao Xinyu, vice president of the China Textiles Import and Export Chamber of Commerce, told our reporter that the chamber of Commerce suggested that in the policy adjustment, particular attention should be paid to the terminal products such as clothing and home textiles, which believed that these products would have a positive impact on the whole industry chain.