Textile And Garment Export Tax Rebates Are Unlikely To Be Drastically Adjusted.

Rumours of a reduction in textile export tax rebate have emerged one after another since the first quarter of this year.

Recently, it was also reported that the export rebate rate of textile products will be lowered in the middle of the year, with a reduction of 5 percentage points, from the current 16% to 11%.

Once again, the market is bound to panic.

However, the author believes that it is very unlikely that the export tax rebate rate will be greatly adjusted once and for all.

Recalling the background of the last national adjustment of textile export tax rebates: from August 2008 onwards, the state has increased the export tax rebate rate of textile and clothing 4 times in a short period of six months, from the original 11% to 16%.

This is based on the superposition of multiple factors such as RMB appreciation, rising costs and shrinking international demand. The growth rate of China's textile and clothing exports has declined significantly.

This round of adjustment of export tax rebate rate is used to help enterprises overcome the difficulties of the financial crisis.

Look at the current situation, though the first quarter of 2011, China's textiles

The author thinks that the government is trying to control it at present.

Recent rumors that the relevant departments have basically reached a consensus, the textile export tax rebate rate will not be reduced by less than 5 percentage points, it seems that all products down 5 percentage points or more.

This obviously does not conform to the law of policy introduction. Generally, policies are generally tried in a small way, and then progressively pushed forward.

If we follow the rumors, then the government should raise interest rates by 2 percentage points at a time, and raise the deposit reserve ratio by 10 percentage points at a time.

Obviously, any responsible government will not do this, and what's more, it is for the textile industry, which involves tens of thousands of people in the people's livelihood.

In early April this year, according to the author's understanding, the Ministry of industry, the development and Reform Commission and relevant state departments have discussed whether or not to adjust the export tax rebates for some products.

According to the actual export situation in 2010, the export tax rebate policy adjustment will involve an export volume of about US $40 billion, with a reduction of 2~3 points.

During the recent rumors, I again consulted the people concerned. In order to curb the excessive growth of foreign exchange reserves, the Ministry of finance really formulated a plan to reduce export rebates in March. Textiles and clothing were also included, with an adjustment rate of 2~3 percentage points.

In some other industries, the rate of tax rebate reduction is more than 5 percentage points.

Another related person said that the export tax rebate rate reduction policy may be launched in 6~7. Due to early coordination, the first time the tax rebate reduction policy was introduced, textiles and clothing were not falling.

Of course, these are just guesses, and ultimately we need to see the policies adopted.

Trade frictions such as special safeguard also make it difficult for textile and garment industry to export.