The Tax Rebate Rate Has Been Pushed Up By Foreign Businessmen, And Foreign Trade Enterprises Are Facing Another Crisis.

"The line of life and death is one or two points."

Chen Dan, special assistant to President of Huabao Footwear Company of Huajian group in Dongguan, Guangdong, told the Shanghai Securities Daily that although the country has raised the export tax rebate rate several times, the export quota has not reached the level of life-saving for the foreign trade export industry. "If it can be raised to 15%-17%, the situation will be very different, which will be very helpful."

However, a new situation emerged after the export tax rebate was raised: foreign importers exclaimed the export tax rebate rate as an excuse for export enterprises to lower their quotations, and some of the interests of the country raising the export tax rebate rate were squeezed out by foreign businessmen.

In August 1, 2008, November 1st and December 1st, the export tax rebate rate of some commodities was continuously raised in China.

Recently, the Ministry of Finance and the State Administration of Taxation once again issued the notice on improving the export tax rebate rate for textiles and garments. It clearly raised the export tax rebate rate of textiles and clothing from 14% to 15% from February 1, 2009, adjusted 3325 tax numbers, and gave credit support to enterprises with better Fundamentals but temporarily operating and financial difficulties.

A person in charge of a clothing enterprise in Jiading, Shanghai, said that the export tax rebate policy of the state did give enterprises some breathing space. "Many enterprises are struggling on the margin line of profit and loss, giving more points to them, so that they can earn a bite to eat."

Sun Jianrong, chairman of the Northern International Group, said, "if the export tax rebate rate is still so low, the enterprise can not live, let alone adjust, and at least can live first."

Jia Kang, director of the Ministry of Finance Research Institute, has revealed that there is still room for the financial sector to support textile enterprises in terms of export tax rebates. His personal view is that he will not rule out a further increase to 17% in the future.

"But we are also faced with a concomitant problem. After the export tax rebate increased, overseas buyers correspondingly demanded to lower the purchase price and share our policy preferences, so there was actually not much profit in the pocket of enterprises."

The head of the above garment enterprises in Jiading said.

A person who has long paid attention to foreign trade in Guangzhou has pointed out to reporters that the increase in export tax rebate can really alleviate some of the burden of enterprises, but it can not fundamentally solve the problem.

She said that the problem now is that if overseas customers do not place orders, the factories will not generate profits, which can not fundamentally change the current situation of the external market demand of China's export products.

On the other hand, as China's international bargaining power of enterprises is generally weak, foreign importers, on the pretext of raising the export tax rebate rate, require Chinese enterprises to lower export quotas, and some of the interests of the state raising the export tax rebate rate may be squeezed by foreign businessmen, and the stimulating effect of the policy may be weakened.

The owner of a shoe and hat factory in Longhua, Shenzhen, told reporters that there are still some orders in the company, which can barely maintain the operation of the production line.

"If the order is still declining, the factory will have to go bankrupt, so it's a day to see it."

Even as China's largest female shoe processing manufacturer, Huajian group is also worried about orders.

"Because of the uncertainty of the future, we do not know how low the economy will be. After a few months, it is difficult for us to estimate." Chen Dan admitted that the number of orders received this year was significantly reduced, in March, 8 in the same period last year, 6 in April, and less in May.

The Guangdong foreign economic and Trade Commission also told reporters that it was generally seen that the factory's foreign trade orders had fallen by three or four, and there was no sign of recovery.

The employment of migrant workers is still difficult. In the Keqiao of Shaoxing, Yu Pu, the chief of personnel of a fabric processing enterprise, told reporters that when the new year was still one month away, the factory had already had a holiday due to the fact that the order was too small. Many workers also chose to leave because of the lack of things, so there are not many workers in the factory now.

"We haven't started a few days now," said Yu Yu PU. "We have to look at the order and decide whether to hire or not.

Guo Weiwen, one of China's largest foundries, a spokesman for Guangdong Wan Bang shoes company, said that the order was relatively stable because of the production of shoes for Adidas OEM. Last year, it was basically unchanged from last year. It is estimated that there will be no big change this year.

According to the statistics of the human resources market in Hangzhou, the number of people on the first working day is about 500, which is basically the same as last year.

A total of 300 units provided 4329 jobs, which were significantly reduced compared with last year, and 687 units provided 8025 jobs on the first day of last year.

There are 936 registered enterprises in Wenzhou on the first day to the job center, 119 less than the same period last year, and the enterprises without registration and recruitment are basically foreign trade and manufacturing enterprises.

People who have already gone out can not find jobs, and migrant workers at home continue to pour into the Pearl River Delta.

To greet them is the deep locked iron gate and the cold winter which has not yet returned.

The Dongguan Association of foreign invested enterprises has made an estimate that 9000 factories in 45000 factories in three cities of Guangzhou, Dongguan and Shenzhen are expected to close before and after the Spring Festival, which means that 2 million 700 thousand workers will be unemployed.

"Last year, the factories that fell down almost collapsed, some of them were not operating well, some of them were owners of Taiwanese capital and Hong Kong's capital. They did not want to continue doing this hard work in the second generation, and they went out of business."

Chen Dan said that workers in these factories basically disbanded home in November last year.

"Cold winter" has forced independent innovation. In view of the difficulties faced by the textile and garment industry, some textile provinces such as Guangdong and Jiangsu launched a number of supporting measures last year.

In the second half of last year, the Ministry of finance of Guangdong province arranged 160 million yuan to subsidized the general export trade of seven traditional labor intensive commodities, such as textiles and clothing, and arranged 50 million yuan to support enterprises to develop new markets such as Southeast Asia in the case of the depressed US market, and arrange 100 million yuan to promote the export of Guangdong's own brand goods and high-tech products.

Jiangsu provincial finance department announced in December last year that the labor-intensive goods and high technology and high value-added commodities that had been exported for export tax rebates before the end of September 2008 will be subsidized in a certain proportion according to the tax rebate balance. The standard is based on the subsidy of 10 thousand yuan per export tax rebate, and on this basis, 1 yuan will be subsidized for each export of US $1.

A total of 8071 enterprises in the province enjoy a subsidy of 328 million 890 thousand yuan for the export tax rebate balance.

However, the relevant enterprises are still hungry.

On the one hand, tax rebates and orders are not yet satisfied. On the one hand, they are more stringent standards and trade protectionism.

"The impact on export orders depends on the industry. For our industries that are difficult to pfer production and processing sites, it will not be affected by the US call such as buying domestic products, but for some electronic products and high-tech products, the impact may be even greater."

Chen Dan's explanation also confirms the figures of customs statistics.

In export commodities, the export tax rebate rate increase policy involves the growth of commodity exports, and the decline in exports of resources and energy products.

Since August last year, China has raised the export tax rebate rate of some commodities four times, and in January this year, there was an increase in commodity exports.

Among them, clothing exports amounted to 10 billion 510 million US dollars, an increase of 5.7%; the export of footwear products was 2 billion 910 million US dollars, an increase of 10.6%; the export of luggage and bags was US $1 billion 150 million, an increase of 8.3%.

Over the same period, China's exports of mechanical and electrical products decreased by 20.9% from 49 billion 140 million US dollars, accounting for 54.3% of China's total exports over the same period, down 2.4 percentage points from the same period last year.

Among them, exports of electrical and electronic products were 18 billion 120 million US dollars, down 28.3%, and exports of machinery and equipment were US $16 billion 940 million, down 16%.

The export of high-tech products was 21 billion 660 million US dollars, down 28%.

The policy of domestic demand triggers the improvement of enterprises. Under the severe export situation, the domestic policy of stimulating domestic demand and encouraging consumption has found a guiding significance for these export oriented enterprises.

"95% of our profits came from exports, but the policy of stimulating domestic demand has made some adjustments to our plans this year."

Chen Dan told reporters that although they used to have sales in the country, they never deliberately expanded the market and channels, let alone brand promotion and publicity. But this year, Huajian intends to make more efforts and funds in the development of the domestic market.

Chen Dan said, "although the cost will increase, according to the vertical comparison, in this economic situation, the cost is reduced."

Moreover, the company has cash flow and has the ability to cope with the cost.

However, textile and garment enterprises should also keep a clear mind. The improvement of export tax rebate rate should be a very special step in the special period. From a long-term perspective, textile and garment enterprises can achieve development plans only through pformation and upgrading.

Zhejiang Jiaxing city government official told reporters.

The relevant experts of the Ministry of Commerce pointed out that even if there is room for policy, the external environment is not good enough to force enterprises to take the initiative to adjust, and the goal of the government is also hoping that enterprises can upgrade and pform.

It is reported that since last year's policies, some enterprises have turned to the domestic market, turned to the service industry, and reduced some excess capacity, which has reduced their current difficulties.

With the deteriorating export situation, many generations of factories have adopted self-help strategies.

Dongguan City Electronics Co., Ltd. responsible person said, the company is strengthening research and development, design, and strengthen market research.

In recent months, the OEM orders for OEM have decreased by 40%, but the export of independent brand electronic products is growing.

Recently, the industry promotion plan of various industries has also made clear that we should coordinate the two markets at home and abroad, actively expand domestic consumption, develop new products and expand the rural market.

Insiders pointed out that starting a huge rural domestic demand market will be a major outlet for the relevant enterprises.

More clothing investment information, click here to enter the responsibility editor: Wang Xiaonan