New Test Of Leather Shoe Making Enterprises In China

The tax refund policy for export products is an international practice and an important means for the state to support export.

China began to implement the export tax rebate policy in 1985. After that, it carried out major reforms in 1994, 2003, 2004 and 2006 respectively.

In response to the excessive trade surplus, our government ended up with the strongest blow in recent years.

Since July 1st, five ministries and commissions of the Ministry of finance, the State Administration of Taxation, the NDRC, the Ministry of Commerce and the General Administration of customs have adjusted the export tax rebate policy for 2831 commodities, covering 37% of the total number of goods in the customs tariff.

In the export tax rebate adjustment, the impact on enterprises everywhere is obvious, leather enterprises are the first to bear the brunt.

In July, the new export tax rebate policy was implemented to alleviate China's long-run trade surplus and reduce trade frictions.

The export tax rebate adjustment, clothing, shoes and hats, viscose fiber are in the adjustment, the export tax rebate rate from 13% to 11%, fur clothing from 13% to 5%, leather and chemical export tax rebate to zero.

Since July, the export tax has been reduced, and the test of shoe enterprises has really begun.

In addition to layoffs, some enterprises also have the means of controlling costs, such as saving water and electricity, and improving management efficiency.

According to common sense, after the cost of export enterprises rises, they can raise their export prices by reducing their pressure.

"But you won't have the price advantage, and now the competition is becoming more and more intense. You must not have a global view."

Because most Chinese footwear enterprises rely mainly on OEM production, the initiative is often in the hands of importers.

After bargaining, manufacturers can only receive export list with low price. As competition becomes more and more intense, profits are getting lower and lower.

The way to eat by tax rebate is at the end.

Leather products and other products are directly affected by the export tax rebate policy, and the situation reflected everywhere is as follows: Shandong Province: enterprises lacking superiority will therefore be "closed".

In Shandong, leather enterprises are mostly materials processing enterprises. The average profit rate of the whole industry is only about 4%. Reducing or abolishing the export tax rebate rate has the greatest impact on the leather industry export.

Experts believe that the export of leather industry will be reduced sharply, and the enterprises lacking superiority will therefore "close".

Jiangxi Province: the products with greater impact are leather, leather products, footwear, buttons and so on.

Among them, the raw leather industry is mainly foreign-funded enterprises. This part has been operating for many years and has many bank loans, and its business varieties are relatively single, and its ability to deal with external risks is weak.

The tax rebate was abolished from 8% to all, and the export tax rebate from US $0.3 to $0.4 per dollar was reduced.

Henan Province: 40 million dollars will come to nothing.

Recently, in order to fully understand the impact of the export tax rebate on Henan, the State Administration of Taxation has made a calculation and found that because of the export tax rebate rate adjustment, Zhengzhou's export enterprises will reduce about 40 million US dollars in foreign exchange earning income in the second half of this year.

Fujian Province: the area is large and the amount is large.

It is estimated that after the reduction of the export tax rebate rate in July 1st, the tax deduction and refund amount will be reduced by 26 million 310 thousand yuan over the previous year, and the exemption tax will be reduced by 11 million 680 thousand yuan.

At present, the government has convened various relevant departments quickly, and the departments of customs, commodity inspection, foreign trade and State Taxation have been working together to help enterprises export.

Zhejiang Province: the new tax rebate policy has forced the pformation of export enterprises.

The tax rebate has not set up a pitional period and has not yet fulfilled the contract.

The most affected industries are leather clothing, hardware and chemical industries. The export tax rebate has been reduced by more than 8 points. The export of general trade mode in these industries will be seriously affected, and directly lead to the loss of competitive advantages such as neighboring countries.

Hubei Province: leather enterprises accelerate domestic expansion.

The export tax rebate rate is down, which has a great impact on the leather industry in the whole province.

Some low and low value-added small and medium-sized foreign trade processing enterprises may withdraw from the market.

It is learnt that in order to mitigate the impact of the new deal, besides exporting to high value-added products, garment enterprises in the province are also ready to accelerate the development of the domestic market by way of group formation.

The export of domestic fur industry is worsening.

China's fur industry has just adapted to the rectification and clearance policy of Russia's main battlefield, and has also met the adjustment of the state's export tax rebate.

The export rebate rate of leather and fur products decreased from 13% to 5%, making the domestic fur industry worse.

The development of fur industry is very bad this year, and many enterprises have already stopped production.

This is mainly due to the continuous decline in prices of mink and other skin products in the near future.

In addition, the increase of the RMB exchange rate has made the fur export enterprises suffer more losses in the process of settlement of foreign exchange.

As an industry that takes livestock and livestock products as the main raw material, it is thought that the state will support the fur industry. However, the reduction of the export tax rebate rate has greatly affected the fur manufacturing enterprises.

The rising trend of leather export prices is obvious. According to Su Chaoying, Secretary General of the China Leather Association, the import and export of leather as a "processing trade", the import of raw materials is not taxed, exports are not refunded, and there is no tariff burden on enterprises.

However, since last year, this preferential policy for processing trade has been abolished, and the import and export of leather products began to be taxed according to the general normal trade tax rate.

For example, leather semi-finished products need to pay 5% to 14% customs duties and 17% value added tax, thus increasing the export cost of leather goods.

"This year, the Pearl River Delta region is experiencing a shortage of migrant workers, and migrant workers are surging towards the Yangtze River Delta. Labor costs have increased correspondingly, and the price of imported raw leather and related products has increased. The average price of women's bags has increased by about 30% on average."

Ms. Guangzhou, Rui Qi leather company, said.

Ye Xiangju, director of the Information Office of the China Leather Association, said that because of the stricter national requirements for social security, the rise in labor prices of enterprises is inevitable.

"China is a large country in leather products production. The demand for raw materials is large and domestic production is not enough, especially for high-grade varieties.

In recent years, the cost of raw materials for China's leather imports has been rising, coupled with the appreciation of the renminbi, the continuous increase in pport costs and the adjustment of the export tax rebate policy.

Editor's note: the export tax rebate rate was lowered at the time of policy design. It adopted a policy of "maintaining pressure" and released the clear signal of the national industrial structure and the adjustment of export commodity structure.

Leather enterprises should be recruited to deal with the new deal. Some larger enterprises can set up factories in the sea, sell their products overseas, sell abroad, and consider brands going abroad, setting up direct selling stores overseas, or registering brands abroad.

Enterprises should take corresponding measures according to their own characteristics.

For example, the footwear enterprises should adjust their export varieties, reduce the "low value" goods and increase the export proportion of high-end products.

Enterprises should implement the strategy of differentiated products management, do not set prices in traditional markets, and strive to win by quality.

The export tax rebate policy adjustment not only tests domestic enterprises, but also tests foreign importers.

In order to cope with the reduction of tax rebate rate, export enterprises will inevitably adjust their export prices. In the process, they will inevitably lose some customers who are mainly engaged in low price and low grade products, and some small foreign importers will be forced to retreat.

Taking this opportunity, it is easier for enterprises to discover and cultivate a group of high quality customers.

As long as there are stable orders, fixed large customers and marketable commodities, the effect of tax rebate reduction can still be digested.