The textile tax rebate callback policy has been passed and will be introduced at an appropriate time
China’s textile industry, under heavy cost pressure, is expected to regain its vitality. Yesterday, people familiar with the matter told reporters that the textile tax rebate rate callback policy has been passed and will be introduced at an appropriate time. “A two-point tax rebate adjustment means a two-point increase in profits for the company.” Industry observer Wang Qianjin said that for many Chinese textile companies with profits of just over 3%, “this has become the most direct rescue method.”
It is understood that in this export tax rebate policy, textiles will be adjusted back from 11% to 13%, and clothing will be adjusted back from 11% to 15%. As of press time, the relevant departments have not confirmed the details and time of the introduction of the new policy, but the industry generally believes that in the face of major changes in the macroeconomic background, a tax rebate callback is imminent.
“In fact, the plan has been finalized for a long time, but because the management still has large differences in judgment on the industry situation, comprehensive weighing is still being carried out.” A person in charge of a textile company told reporters yesterday. But like many peers, he believes that with the release of textile and clothing export data in the first half of the year, the judgment on the plight of China’s textile industry will become increasingly clear. “As a representative of China’s labor-intensive industries, the impact China’s textile industry has received in the past year is indisputable.”
In order to alleviate the pressure of continued rising trade surplus, the country significantly adjusted export tax rebates on July 1 last year. Once this news was released, it caused a strong response from all walks of life in the country, and the profits of textile export companies were further diluted.
Chinese textile companies have always relied on increasing production and compressing profit margins to gain competitive advantages. However, recently, more and more figures have begun to describe the helplessness of this industry. A report from Global Sources stated that due to rising labor and raw material costs, 93% of promotional apparel suppliers in Greater China plan to increase export prices in 2008. The increase in raw material and labor costs and the strengthening of the RMB have made it difficult for textile manufacturers to digest. As prices increase, volume decreases. Since the beginning of this year, the growth rate of China’s textile exports has continued to decline, especially clothing exports. Total exports in May increased by 1.1% year-on-year, setting a new low for growth this year.
Wang Qianjin said that the current tone of the country has been set, which is to appropriately support the industry to tide over the difficulties. “We obviously cannot completely equate industrial upgrading and elimination.” Wang Qianjin believes that after the introduction of the textile tax rebate callback policy, it is not ruled out that industries such as shoes and hats, toys, etc. may follow suit and launch relevant support policies. AAGFHJTYJUTI
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