New tax discount for Chinese textile exports
today Apr 1, 2009
For the fourth time since August 2008 China has raised tax discounts on exports of textiles. A new discount of 16% is aiming to arrest the decline of exports which reached 32.9% between January and February.
Exports have been declining for some months and have led to the closure of almost 2,000 factories in the south of the country. A drop in demand for Chinese goods has been of benefit to many neighbouring countries, but many large Chinese manufacturing companies have had to trim their production and economise.
This new government measure consists of a 16% tax discount on textiles; cotton; silk, wool and even synthetic fibres, and includes clothing like hosiery. Clothes and accessories made from leather will receive a 13% discount on export tax. This export incentive, once again, risks aggravating businesses abroad.
Equally suffering from a fall in exports, American companies are pointing fingers at China. “China is subsidising exports to the USA, causing a new wave of arrivals of textile products – and a new wave of closures of American textile companies,” complained Cass Johnson, president of the National Council of Textile Organizations.
By Jonathan Fulwell (Source: Matthieu Guinebault)
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