Textile export tax rebate rate should not be lowered at this stage
In recent days, there have been rumors of a decline in the export tax rebate rate for products represented by textiles and clothing in the community, especially with the gradual progress of export tax rebates at the beginning of July. Rumors have escalated and even caused some textile and clothing companies to panic. A few days ago, the reporter interviewed related parties and enterprises about the truthfulness of the situation and the possibility of this policy adjustment. They said that the textile industry is facing multiple pressures on raw materials, energy, funds, and exchange rates, even though China's textile industry started in the first quarter. Good, but all kinds of risks go hand in hand, there are still many uncertainties in the development of the industry. At this stage, it is not appropriate to lower the tax rebate rate for textile and apparel exports.
The reporter learned from the interview that it is not true that these related textile and apparel prices will be lowered by the export tax rebate rate. The relevant national ministries have denied this statement, saying that they have not yet decided to adjust the export tax rebate rate in the near future and believe that the society is catching on News hype is not conducive to the steady development of the national economy and the industry. At the same time, the responsible officials of relevant ministries and commissions stated that people should realize that with the needs of national economy and industrial development, the national macro-control policies will be adjusted accordingly, and such adjustments will follow the basics of science, operability, and sustainability. in principle.
Sun Huaibin, director of the China Textile Economy Research Center, believes that the reason why textile and apparel companies are so sensitive to export tax rebate adjustments is that textile and garment companies, which are mostly small and medium-sized enterprises, cannot withstand the loss of profits. In 2010, China's textile exports totaled 77.051 billion U.S. dollars, and export tax rebates amounted to approximately 78.5 billion U.S. dollars. Fluctuation of one percentage point will affect the textile industry's profit of approximately RMB 5.2 billion. In particular, textile and apparel companies have been at a meager profit for a long time. When a substantial number of SMEs are facing death or suffering, a one-percentage-point reduction will mean that a large number of small and medium-sized enterprises will slip into the line of life and death.
Judging from the motivations of previous export tax rebate adjustments, from January 1998 to July 2001, the export tax rebate rate for textiles and garments was gradually increased from 6% to 15% in three phases, clothing was increased from 6% to 17%, and export tax rebates were raised. The reason is to deal with the huge impact of the Asian financial crisis in 1998 on China’s exports. The global financial crisis caused by the US subprime mortgage crisis in 2008 caused the export of textiles and garments to be severely hampered. Since the second half of 2008, the export growth rate has continued to decline, and the rate of export tax rebates has been pulled back again. On February 4, 2009, the State Council passed the adjustment plan for the textile industry in principle, and raised the textile and apparel export tax rebate rate from 14% to 15%. On April 1st of the same year, the export tax rebate rate for textiles and clothing was increased to 16%.
According to relevant sources, the recent rumors that frequent reductions in export tax rates are mainly due to the gradual recovery of China’s merchandise exports including textiles and garments last year. The national economy has generally gone out of the shadow of the financial crisis, and China’s exports have re-emerged after a short-term deficit. The surplus is now surplus, and the state has increased its efforts to limit the export of "two high and one capital" industries. Under this circumstance, it is not ruled out that the country may have the possibility of adjusting the export tax rebate rate, but different industries will also adopt different adjustment strategies. It is understood that in the first quarter of this year, China’s textile and apparel exports continued to grow, with total exports reaching US$49.866 billion, a year-on-year increase of 23.68%, and an increase of 8.24 percentage points from the same period of last year. From the perspective of the breakdown of China's textile and garment export index, the price contribution of textile and apparel exports in the first three months was higher than that of the same period of last year, but the contribution of exports declined. According to Sun Huaibin, the increase in textile and apparel exports this year was mainly due to the increase in value-added products, not the increase in the number of exports.
Regarding the current rumors that the textile and garment export tax rebate rate is lowered, Sun Huaibin said that some untrue news in the society has caused panic among textile companies, especially a large number of small and medium-sized enterprises. This panic level is related to the current textile industry and enterprises. The difficult environment is directly related. Therefore, the industry and enterprises call on the country not to reduce the textile export tax rebate rate under the current circumstances where the industry bears multiple pressures to maintain the stable operation of the industry.
Sun Huaibin said that from an international perspective, despite the overall recovery, risks remain, the dollar continues to depreciate, and the European debt crisis has caused the European economy to be in trouble. Japan’s strong earthquake has hit the economy and emerging markets are generally facing inflationary pressures. The political situation in North Africa is turbulent. Under the influence of these factors, international commodity prices have fluctuated significantly, and the international market is full of variables and risks. The situation is very serious and increases the risk of China's textile and clothing exports.
From the domestic perspective, although the economic data of the country and the industry in the first quarter were relatively satisfactory and they had a good start, there were last year's turning factors and the adjustment of statistical standards. It is undeniable that the current industry is facing increasing variables and risks. In particular, the instability of the prices of textile raw materials such as cotton and chemical fiber has caused textile companies to gradually lose their sense of well-being. Downstream companies cannot effectively convey price factors, and their affordability is getting weaker and weaker. With the continuous increase in the cost of coal, electricity, oil, and transportation since the beginning of this year, monetary policy has tightened and the exchange rate has generally risen, leading to increased risks. If the textile export tax rebate rate is lowered at this time, it will certainly have a major impact on the operation and employment of export enterprises.
Sun Huai-bin told companies that they should calmly and rationally face these unconfirmed news, overcome panic, enhance crisis awareness, step up their hard work, prepare to deal with all variables, and have excellent product quality and competitive comprehensive strength. Vigorously open up the domestic sales market, overcome risks, and achieve stable development.
In the interview, the company’s response was also very strong. They stated that China’s textile companies are still mainly export-oriented, and the industry’s profit margins are relatively low, and the overall anti-risk capability is still relatively weak. Once faced with the rise of *** appreciation, rising labor costs, rising raw material prices, and trade protectionism, most SMEs will face bankruptcy risks. If the export tax rebate rate is lowered again, even if it is reduced by 5 percentage points at a time, the only meager profits for large numbers of SMEs will cease to exist. This year, together with the continuous tightening of industry funds this year, the risk of bankruptcy will rise sharply. Although the tax rebate rate adjustment complies with the guiding ideology of national industrial upgrading and vigorously improving domestic demand, the textile industry is related to the employment of tens of millions of people. Therefore, the timing and intensity of choosing a tax rebate rate are very important. They suggested that relevant state departments should fully consider the current difficulties faced by the textile and clothing industry when adjusting export tax rebate policies and make scientific decisions.
The reporter learned from the interview that it is not true that these related textile and apparel prices will be lowered by the export tax rebate rate. The relevant national ministries have denied this statement, saying that they have not yet decided to adjust the export tax rebate rate in the near future and believe that the society is catching on News hype is not conducive to the steady development of the national economy and the industry. At the same time, the responsible officials of relevant ministries and commissions stated that people should realize that with the needs of national economy and industrial development, the national macro-control policies will be adjusted accordingly, and such adjustments will follow the basics of science, operability, and sustainability. in principle.
Sun Huaibin, director of the China Textile Economy Research Center, believes that the reason why textile and apparel companies are so sensitive to export tax rebate adjustments is that textile and garment companies, which are mostly small and medium-sized enterprises, cannot withstand the loss of profits. In 2010, China's textile exports totaled 77.051 billion U.S. dollars, and export tax rebates amounted to approximately 78.5 billion U.S. dollars. Fluctuation of one percentage point will affect the textile industry's profit of approximately RMB 5.2 billion. In particular, textile and apparel companies have been at a meager profit for a long time. When a substantial number of SMEs are facing death or suffering, a one-percentage-point reduction will mean that a large number of small and medium-sized enterprises will slip into the line of life and death.
Judging from the motivations of previous export tax rebate adjustments, from January 1998 to July 2001, the export tax rebate rate for textiles and garments was gradually increased from 6% to 15% in three phases, clothing was increased from 6% to 17%, and export tax rebates were raised. The reason is to deal with the huge impact of the Asian financial crisis in 1998 on China’s exports. The global financial crisis caused by the US subprime mortgage crisis in 2008 caused the export of textiles and garments to be severely hampered. Since the second half of 2008, the export growth rate has continued to decline, and the rate of export tax rebates has been pulled back again. On February 4, 2009, the State Council passed the adjustment plan for the textile industry in principle, and raised the textile and apparel export tax rebate rate from 14% to 15%. On April 1st of the same year, the export tax rebate rate for textiles and clothing was increased to 16%.
According to relevant sources, the recent rumors that frequent reductions in export tax rates are mainly due to the gradual recovery of China’s merchandise exports including textiles and garments last year. The national economy has generally gone out of the shadow of the financial crisis, and China’s exports have re-emerged after a short-term deficit. The surplus is now surplus, and the state has increased its efforts to limit the export of "two high and one capital" industries. Under this circumstance, it is not ruled out that the country may have the possibility of adjusting the export tax rebate rate, but different industries will also adopt different adjustment strategies. It is understood that in the first quarter of this year, China’s textile and apparel exports continued to grow, with total exports reaching US$49.866 billion, a year-on-year increase of 23.68%, and an increase of 8.24 percentage points from the same period of last year. From the perspective of the breakdown of China's textile and garment export index, the price contribution of textile and apparel exports in the first three months was higher than that of the same period of last year, but the contribution of exports declined. According to Sun Huaibin, the increase in textile and apparel exports this year was mainly due to the increase in value-added products, not the increase in the number of exports.
Regarding the current rumors that the textile and garment export tax rebate rate is lowered, Sun Huaibin said that some untrue news in the society has caused panic among textile companies, especially a large number of small and medium-sized enterprises. This panic level is related to the current textile industry and enterprises. The difficult environment is directly related. Therefore, the industry and enterprises call on the country not to reduce the textile export tax rebate rate under the current circumstances where the industry bears multiple pressures to maintain the stable operation of the industry.
Sun Huaibin said that from an international perspective, despite the overall recovery, risks remain, the dollar continues to depreciate, and the European debt crisis has caused the European economy to be in trouble. Japan’s strong earthquake has hit the economy and emerging markets are generally facing inflationary pressures. The political situation in North Africa is turbulent. Under the influence of these factors, international commodity prices have fluctuated significantly, and the international market is full of variables and risks. The situation is very serious and increases the risk of China's textile and clothing exports.
From the domestic perspective, although the economic data of the country and the industry in the first quarter were relatively satisfactory and they had a good start, there were last year's turning factors and the adjustment of statistical standards. It is undeniable that the current industry is facing increasing variables and risks. In particular, the instability of the prices of textile raw materials such as cotton and chemical fiber has caused textile companies to gradually lose their sense of well-being. Downstream companies cannot effectively convey price factors, and their affordability is getting weaker and weaker. With the continuous increase in the cost of coal, electricity, oil, and transportation since the beginning of this year, monetary policy has tightened and the exchange rate has generally risen, leading to increased risks. If the textile export tax rebate rate is lowered at this time, it will certainly have a major impact on the operation and employment of export enterprises.
Sun Huai-bin told companies that they should calmly and rationally face these unconfirmed news, overcome panic, enhance crisis awareness, step up their hard work, prepare to deal with all variables, and have excellent product quality and competitive comprehensive strength. Vigorously open up the domestic sales market, overcome risks, and achieve stable development.
In the interview, the company’s response was also very strong. They stated that China’s textile companies are still mainly export-oriented, and the industry’s profit margins are relatively low, and the overall anti-risk capability is still relatively weak. Once faced with the rise of *** appreciation, rising labor costs, rising raw material prices, and trade protectionism, most SMEs will face bankruptcy risks. If the export tax rebate rate is lowered again, even if it is reduced by 5 percentage points at a time, the only meager profits for large numbers of SMEs will cease to exist. This year, together with the continuous tightening of industry funds this year, the risk of bankruptcy will rise sharply. Although the tax rebate rate adjustment complies with the guiding ideology of national industrial upgrading and vigorously improving domestic demand, the textile industry is related to the employment of tens of millions of people. Therefore, the timing and intensity of choosing a tax rebate rate are very important. They suggested that relevant state departments should fully consider the current difficulties faced by the textile and clothing industry when adjusting export tax rebate policies and make scientific decisions.
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