[Textile] Ten Major Policies Affecting Industry Development

Textile machinery and other technology equipment parts import tax concessions
The Ministry of finance, the national development and Reform Commission, the General Administration of customs and the State Administration of Taxation issued a notice on the implementation of the State Council's policy on accelerating the revitalization of the equipment manufacturing industry in January 14th. It is said that the import tax and import value-added tax paid by the domestic enterprises for the development and manufacture of these equipment and the raw materials which cannot be produced in the country have been retrogression in the key areas of the 16 major technical equipment for structural adjustment, industrial upgrading and enterprise innovation.
Internal and foreign tax rates are set at 25%.
In March 8th, the draft of the enterprise income tax law, which has attracted much public attention, was submitted to the five session of the ten National People's Congress for consideration. It is proposed to implement a unified income tax rate for domestic and foreign-funded enterprises. This is a major change in China's tax system. The draft applies the same enterprise income tax standard to two types of domestic and foreign enterprises, with a uniform tax rate of 25%. At this point, domestic and foreign enterprises will stand on the same starting line.
On November 28th, the Executive Council of the State Council deliberated and passed the "Regulations on the implementation of enterprise income tax law (Draft)" in principle (hereinafter referred to as the "Implementation Regulations"). The implementation regulations are the matching and refining of the new enterprise income tax law passed in March this year. After further modification, it will be implemented at the same time with the enterprise income tax law in January 1, 2008.
Formal implementation of REACH regulations
The EU REACH regulations were formally implemented in June 1st this year. REACH not only involves the export of chemical products, but also involves downstream industries such as textile, light industry, electronics, household appliances, pharmaceuticals and so on. According to customs data, the bilateral trade of chemical products between China and Europe reached about 50000000000 euros in 2006, of which more than 90% of the volume of trade will be affected by REACH to varying degrees. It is estimated that the increase in registration will raise the total export cost by more than 5%.
Export tax rebate lowered again
Since July 1st this year, the export tax rebate rate of some textile and garment products has been lowered. Among them, clothing, shoes and hats, bags from 13% to 11%, viscose fiber from 11% to 5%.
New tax on value-added tax
Starting from July 1st this year, the Interim Measures for expanding the scope of VAT deduction in the central region will be implemented. This policy is a great benefit for textile and garment enterprises.
The agricultural products processing industry, one of the eight industries, has been divided into 10 sub sectors. Textile, clothing, shoes and hat manufacturing, leather, fur, feather (velvet) and its products industry are also listed among them. The value-added tax reform in the central region will benefit textile and garment enterprises.
Adjustment of processing trade policy
In July 23rd this year, the Ministry of Commerce and the General Administration of Customs jointly issued the catalogue of processing trade restricted commodities, and the announcement was formally implemented from August 23rd. The new catalogue includes 2247 ten customs commodity codes. Of these, 1853 were new coding, mainly involving labour intensive industries such as plastic raw materials and products, textile yarns, cloth, furniture, metal roughing products, etc. 1537 textile products accounted for 83% of the total number of new commodity categories.
The new policy stipulates that in order to restrict the processing trade of Restricted Commodities, the bank's margin account shall be managed in real terms, that is to say, the enterprises shall carry out restricted commodity processing trade. When the contract is put on record, they must pay the deposit margin. If the enterprise processes the finished products export within the prescribed time limit and checks the closing procedures, the deposit and interest will be refunded.
Of course, in September 5th, the Ministry of Commerce, the General Administration of customs and the China Banking Regulatory Commission issued the No. seventy-first notice, which allowed the processing trade enterprises to make payment in the form of cash, guarantee guarantees and other forms of deposit margin, which is conducive to reducing the financial pressure of processing trade enterprises.
RMB exchange rate climbed steadily
Since the exchange rate reform in October 2005 and October 2007, the RMB exchange rate has appreciated more than 11%, and the RMB exchange rate has appreciated by 5% since the beginning of this year.
Loan interest rates continue to rise
China and EU reach agreement on monitoring textile trade agreement
The European Commission announced in October 9th that it had reached a new agreement with China on textile exports. The two sides will double monitor import and export of textiles to China next year, and the existing quota restrictions will end on the end of this year. The new dual monitoring system means that China will track and review the export licensing and import data of the EU issued by China for a period of one year in 2008.
According to the new arrangement, 8 of the original 10 categories of European textiles will be subjected to dual monitoring. They are T-shirts, pullovers, men's trousers, blouses, women's dresses, corsets, bedspreads and linen yarns.
In October 17th, the China Textile Import and Export Chamber of Commerce, the textile industry association and the association of foreign investment enterprises jointly issued a document, which published the qualification standard for the bilateral monitoring textiles export enterprises in Europe in 2008. The six requirements of the standard constituted the threshold for the export of European textile enterprises, and also gave the most textile exporting enterprises a reassurance.
Adoption of the labor contract law
In January 1, 2008, the labor contract law will take effect. The law passed by the ten National People's Congress in June 29th proposed "building and developing harmonious and stable labor relations".
After the promulgation of the new law, it will bring great adjustment to the labor contract regulations and the established labor relations legislation mode for many years. At the same time, the concept of human resources management will also be faced with subversive challenges. The management of human resources and even the comprehensive management of the employing units will be deeply affected.
In the labor-intensive textile and garment industry, there is still a certain degree of non-standard employment. How to solve this problem and build a harmonious employment environment is a test question for many garment enterprises.