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Raised export drawback rate to be small relief
Aug '08
Export drawback rates on some textile and clothes products have been be raised from 11 to 13 percent, effective from August 1, 2008.

Some local enterprises believe that this would give them slight relief. However, they said that their biggest problem is the continuous RMB appreciation and affected them even if European clients agreed to deal in US Dollars.

Statistics show that while the RMB appreciation this year fluctuated around the 5 percent mark, the average profit rate of Chinese textile industry stood at only 3 percent.

Thus, industry experts reflected that the rise in export drawback rate will not be advantageous, since RMB appreciation is showing no signs of slowing down and stabilizing.

It has been noted that due to several factors like strengthening RMB, rising raw-material and oil prices, production cost of Chinese textile industry has climbed, leading to significant hike in product quotations.

Therefore, clients from the EU and US are taking their orders to countries like India, Vietnam, Bangladesh and other South Asian nations.

Importers are finding these countries more profitable because they offer cheaper rates. For instance, a common knit T-shirt from China ranges from 80-90 yuan per dozen, whereas, the export price of Bangladesh is within the range of 65-80 yuan per dozen.

Fibre2fashion News Desk - China

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