New Export Tax Rebates Or Incoming Foreign Textile Enterprises To Panic Again

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"If we cut 5%, we really have no profit."

In May 3rd, Gao Bingxue, chairman of Zhejiang Provincial Native Produce and animal products import and Export Group, told the newspaper that since April, the market rumors that the state will "two high one capital" for "high pollution, high energy consumption and resource".

Gao Bingxue believes that textile and clothing exports are small profits, and the amount of export tax rebates is related to the living conditions of the industry.

If the tax rebate rate plummeted by 5 percentage points, under the multiple pressure of rising raw material and exchange rate, most of the small and medium-sized enterprises will be closed down.

Concerns about the reduction of export tax rebates

The loss of clothing orders will aggravate, and the space for price increases will be even more limited.

In the early morning of May 3rd, people of different colors in Xingang east station of Guangzhou metro line eight rushed out of the ground and rushed to Pazhou Club Hall of Guangzhou Trade Fair.

Looking at an endless stream of purchasers, Gao's learning mood did not become easy.

The RMB exchange rate against the US dollar has dropped 6.5 from 6.58 last month, leading to a 0.8 drop in corporate profits.

Data show that in 2010, the appreciation rate of RMB against the US dollar was 3.1%. In 2011, the RMB began to accelerate the exchange rate against the US dollar. The cumulative increase in the first 4 months has reached 1.9%, and the acceleration of appreciation is obvious.

Gao Bingxue told reporters that if the RMB appreciated by 1%, enterprises would face exchange losses of 16 thousand yuan or about one hundred thousand yuan, and profits would be reduced by about 5%.

Therefore, the product quotation cycle has been fixed from half year to half month, and now it has to be requoted every 10 days. It is totally floating.

"From the point of exchange rate, it is very likely that the long order will lose money."

Ying Xiuzhen, deputy general manager of Ningbo Zhongji import and export company, said that although the RMB exchange rate does not exceed 30% of the quoted price, the appreciation has great uncertainty. Many enterprises only dare to take some short lists.

At present, small and medium-sized foreign trade enterprises have been close to the "life and death pass" under the joint action of commodity prices, price rises of raw materials and appreciation of RMB.

In April 26th, Liu Jingsong, deputy director of the Finance Department of the Ministry of Commerce, said that the average profit margin of China's export enterprises in 2010 was 1.47%, lower than the average profit level of industrial enterprises. In 2011 1 to February, the export profit rate of enterprises dropped further to 1.44%.

Despite the first quarter economic data released, despite the first deficit in 6 years, the total export volume of textiles and clothing in China increased by US $48 billion 627 million, up 23.96% over the same period last year.

"If we exclude the factors that firms generally raise their prices, we will probably be negative growth if they are calculated from volume alone."

Jin Fangping, general manager of China Commodity City (600415), believes that the demand for centralized replenishment of the global market has come to an end this year, and the export price of textile enterprises will be forced to rise by 10%~15%.

The bigger worry comes from rumors that the export tax rebate quota is down.

In 2010, the total export volume of textiles in China amounted to US $77 billion 51 million, and the export tax rebate was about 78 billion 500 million yuan, fluctuating by one percentage point, which was related to the textile industry's profit of about 5 billion 200 million yuan.

Ouyang Meiqin, foreign trade manager of Zhejiang Xin Shi Garments Co., Ltd. pointed out that once the export tax rebate rate is reduced by 5 percentage points, the loss of Chinese clothing (000902) will be aggravated, and the space for raising prices will be even more limited.

Gao said that if rumors become true, domestic textile and garment export enterprises will collapse.

Six major export provinces, the foreign trade situation is not optimistic.

About half of these enterprises have lost profits and increased their losses.

Export tax rebates play an important role in China's import and export trade.

Taking textile and garment industry as an example, Dr. Mei Xin Yu, a Research Institute of international trade and economic cooperation of the Ministry of Commerce, has been sharply reduced by international market demand between August 2008 and April 2009. The cost of the enterprises is rising because of the introduction of the new labor law and the rising of raw material prices. The state has raised the export tax rebate rate 4 times successively from 11% to 16%.

In January 2011, as the international oil price rose, the export tax rebate rate of the upstream chemical fiber industry also increased by 2 percentage points again.

To some extent, the export tax rebate has also become the "umbrella" of domestic enterprises.

Under its asylum, domestic enterprises have never stopped their low price advantage.

Even foreign buyers now understand that as long as the export tax rebate rate is raised, they can lower the price.

Moreover, the current situation of low price growth and the energy consumption ratio of the industry are expanding.

According to the data, the energy consumption of China's textile industry is roughly 4.84 tons of standard coal / ton fiber.

Among them, the clothing industry energy consumption is 1.05 tons of standard coal / ton clothing, weaving industry energy consumption is 0.95 tons of standard coal / ton fiber, printing and dyeing industry energy consumption is about 2.5 tons ~3.2 tons of standard coal / ton fiber, the average is 2.84 tons of standard coal / ton fiber.

This shows that the textile industry is the focus of energy conservation reform.

In 2010, China's export tax rebate amounted to 730 billion yuan, while the trade surplus of US $183 billion 100 million, which meant that the gap between export tax rebate and trade surplus was narrowing.

Therefore, some scholars put forward the proposal of phasing out or reducing the export tax rebate.

But the market is different about this.

Recently, foreign trade research from six major export provinces of Guangdong, Zhejiang, Jiangsu, Liaoning, Sichuan and Hubei showed that about half of the enterprises in these areas decreased their profits and increased their losses.

The industry pointed out that reducing the export tax rebate rate should not be too large, within 1 to 2 percentage points in the year, as far as possible to maintain a relatively stable export environment.

Pan Yinglai, head of Zhejiang gold Textile Trading Co., Ltd. believes that from the strategic perspective of industrial pformation, China's textile export tax rebate should be lowered. What we need to consider now is the rate of tax adjustment and the time to launch the policy.

Pan Yinglai called for other ways to reduce the burden on enterprises, such as lowering the value added tax of industrial enterprises up to 17% and 30% of the income tax.

"As individuals in the real economy, factories are different from shopping malls. They need to invest money continuously in production. It is unreasonable for the two to bear the same amount of tax burden."

Pan Yinglai bluntly said.

Facing the worries of enterprises, Gao Hucheng, Vice Minister of international trade negotiations of the Ministry of Commerce recently made a public response, saying that "the state's foreign trade policy will remain relatively stable".