China Cut Textile Export Tariffs

From July 1, China reduced export rebates on 2,831 products to curb the country's record trade surplus. China has cut export rebates three times this year.

The announcement included apparel and some textiles and toys, which will be reduced 2 percent to 11%.  The widespread cuts appeared to be aimed at products that have been the source of trade friction, with textiles and apparel having been one of the products subject to trade friction complaints.  China has been the target of one-third of all WTO complaints registered in regard to textile and apparel trade.

The policy change will have a big negative impact on textile companies that aren't competitive, especially those that produce low-priced clothing and materials.

China Clothing Industry Profit Likely To Drop 

Expected export value of China’s textile and clothing in 2007 would touch US $165 billion, with a rise rate of 16 percent over 2006. The growth rate in 2006 was 25 percent.

This year, because of drop in export rebate rate, Chinese clothing industry will lose an income of 4.8 billion yuan in the second half of this year and the profit rate would fall by 0.26 percent.

Below are new export rebate rate on some commodities after deduction:

1. Plant oil : 5 percent;
2. Chemical products : 9 percent or 5 percent;
3. Plastics, rubber and their products : 5 percent;
4. Box and bags : 11 percent, the leather products : 5 percent;
5. Paper products : 5 percent;
6. Wearing apparel : 11 percent;
7. Shoes and hat, umbrella and feather products : 11 percent;
8. Stone materials, pottery, glass, pearl, gem, noble metal and its products : 5 percent;
9. Furniture : 11 percent or 9 percent;
10. Wooden products to 5 percent
11. Toy : 11%
12. Viscose fiber : 5 percent

Back to Index of August 2007