Stimulus package begins to show desired effects

18 May '09

2 min read

At the 105th Canton Fair, foreign buyers who are familiar with the Chinese market, pressed hard the local exporters to lower their prices, on the knowledge that export tax rebates have now been increased to 16 percent.

Domestic exhibitors on the other hand, in order to keep their company machinery operational are giving a part or in some cases, the full benefits of the export tax rebates to retain the customer at all costs.

Since the second half of last year, several adjustments in the export rebate policy have started showing the desired effects. Export growth in April was 6.9 percent higher than March, another monthly growth after March.

The recovery was noticeably faster in the labour intensive sectors. Exports of luggage, toys and textile products realized an increase of 22.4 percent, 18 percent and 13.4 percent, respectively, from the previous month.

At the same time, China's export rebate amount has increased to a great extent in recent times. According to statistics, in the first quarter of this year, export rebate amount reached 186.1 billion Yuan, an increase of 29.7 percent year-on-year.

For this reason, experts advice that China can not simply use the means of export tax rebate to defend foreign trade growth, but must guide enterprises to change from their inertia of over-reliance on export rebate adjustment.

They add by saying that the enterprises must start-off by making adjustments on themselves and do everything possible to seek opportunities and achieve breakthroughs to change the declining situation in exports.

Fibre2fashion News Desk - China

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