on Apr 19th, 2007China:Lower tax rebate for textile exports
“Talk of tax rebate cuts on textile and garment exports has cast a shadow on the ongoing 101st China Import and Export Fair (Canton Fair).
The market has been abuzz with rumor that the government is set to lower tax rebates on textile and garment exports by 2 to 4 percentage points, meaning the rebates will be reduced to about 9 percent.
Although the new tax policy has not yet been announced, domestic textile and garment manufacturers have already increased their prices by 5 to 10 percent in the ongoing expo that opened on Sunday, in preparation for the rate cut.
International buyers go on a spending spree during the Canton Fair, which provides Chinese exporters an opportunity to grab big deals for the whole year.
Exporters have factored in 4 percentage points for the possible reduction in export tax rebate, 2 percentage points for a renminbi appreciation this year and a few more percentage points for increases in labor costs, said Wang Yongli, deputy manager with Guangdong-based Silique.
He predicted the new policy will be announced “sooner or later” and said he expected the government to allow exporters a couple of months to adjust to the cost increase.”
 http://www.chinadaily.com.cn/bizchina/2007-04/19/content_854000.htm
