The Straits Times
Nov 20, 2008 |
Tax cuts for textile industry
BEIJING - THE Chinese government has announced a series of tax cuts aimed at helping the country's textile industry through the global financial crisis.
'Textiles are a traditional and an important industry in China', Prime Minister Wen Jiabao told a government meeting on Wednesday, according to a statement on the government's website.
Export tax rebates on textile products will be raised to 17 per cent as part of the decision, the state-run 21st Century Business Herald newspaper reported on Thursday. It did not say when the specifics of the hike would be announced.
The government said a tax cut would 'reduce pressures on the cost of production', along with other measures to help exporters and the elimination of a variety of other unspecified taxes.
Beijing also plans to increase access to credit for small and medium-sized businesses in the textile sector and offer support for those wishing to modernise.
The same meeting decided to offer subsidies for farmers buying home appliances, in a bid to tap rural consumption potential.
'In recent months the textile industry has had to face a serious and unprecedented situation due to economic changes at home and abroad', the government statement said.
In the first quarter of this year, before the financial crisis truly started to unfold, exports of textiles and clothes fell by 11 per cent to US$81.86 billion (S$125.15 billion).
The drop has been blamed on increasing competition from other Asian countries and a rise in the value of the yuan, coupled with an increase in production costs.
The announcement of deeper tax rebates comes a month after China increased export tax rebates for the sector to 14 per cent from 13 per cent on more than a quarter of the goods in the Customs' tariff list.
China's labour-intensive manufacturing sectors have been hit by a combination of rising labour costs, rising materials costs and the appreciation of the Chinese currency, along with the downturn in demand from the ailing US. -- AFP
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