China to adjust export tax mechanism
(Xinhua)
Updated: 2006-07-23 09:08
It is reported that high-value-added steel products, namely galvanized plate
and silicon steel, will remain at the same 11 percent rate, but low-value-added
products such as rods, reinforced bars, round steel and hot-rolled medium plate
will be cut to 8 percent.
Driven by high steel product prices in the
international market, China's steel product exports have shown robust growth
since the beginning of the year. In the first five months, China's steel product
exports hit a new high of 12.7 million tons, up 35.2 percent, while imports
decreased 27.6 percent to 7.8 million tons.
"China's steel product
exports continued to increase and steel product prices recovered significantly
this year, although China was still seriously hampered by steel overcapacity,"
said Jia Liangqun, a vice general manager with Mysteel, a leading steel
consulting firm.
But Jia asserts that steel prices will drop in the
second half of the year: due to the new tax rebate policy and a cool off in
China's fixed asset investments.
Baosteel Group, the largest of its kind
in China, will see its export costs rise by RMB 150 ($18.75) per ton after the
tax rebate for steel plate exports is reduced, said Wang Xishun, an official
with the export department of the group.
Steel plate is Baosteel's main
export, with 10 percent of its steel plates exported to foreign markets each
year. Baosteel will try to counter the new policy, Wang said.
A similar
situation exists with the textile and machine-building industries, and to lower
export rebates rate for them may help these industries upgrade industrial
structure, industry officials said. Many Chinese corporations have also
considered shifting their business strategy from commodity exports to overseas
investment.
Industry officials propose a transition period. "According
to international practice, enterprises need a proper preparation period,
lasting from three months to six months," said Long Guoqiang, deputy
director-general of Foreign Economic Relations, Development Research Center of
the State Council.
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